Late Filing and Late Payment in Georgia: Penalties, Interest and How to Put It Right

In the country of Georgia the Tax Code prices three things separately: filing a return late, paying tax late, and declaring less tax than was due. At the time of writing a late return is fined at 5% of the tax it shows where the delay is not more than two months and at 10% where it is longer; where that tax is zero, no fine is imposed. Unpaid tax carries interest of 0.05% for every day. Understated tax carries a fine of 10%, 25% or 50% of the shortfall, depending on its size. A corrected return filed before the tax authority moves removes the fine for the misstatement, though not the interest. Every figure in this article was read in the consolidated Georgian text on the Legislative Herald on 13 October 2026 and should be confirmed before you rely on it.

A return filed late costs a percentage of the tax it shows

The fine for missing a filing deadline is counted on the tax that the late return puts up for payment. At the time of writing the Georgian text of the Code sets it at 5% of that tax where the delay is not more than two months and at 10% where it is longer, and says no fine is imposed where the tax under the return is zero. Two details sit behind this. A person who files nothing is treated as having filed a return showing zero tax, unless the Minister of Finance has excluded that return from the rule, and the real return, when it arrives, is a late one. At the time of writing the Minister's orders exclude, among others, a company's VAT return and, for a VAT-registered company, its monthly profit tax and payroll returns: unfiled, those stay on the record as unfiled. And the fine is separate from interest: a return can be on time and the payment late, or the reverse.

Tax paid late carries interest for every day

Late payment is priced by time. Interest is 0.05% of the unpaid tax for each day of delay, counted from the day after the due date, and the day you pay counts as a day of delay. It is charged on a balance: the Code describes the base as the difference between a taxpayer's unpaid liabilities and its overpaid taxes. Interest stops accruing three years after it began, and it is not charged on fines. At 0.05% a day, a 30-day month costs 1.5% and a full year 18.25%. Filing on time does not stop it. Only payment does.

Tax understated in a return is fined at 10%, 25% or 50% of the shortfall

An incorrect return is a different breach from a late one. The fine is counted on the tax that was left out, and the scale depends on how large the shortfall is against the tax the return showed.

Three limits apply. The total of these fines imposed after an audit cannot exceed the tax that the audit assessed. Half of the fines assessed in an audit are cancelled where, within 30 days of receiving the tax notice, the taxpayer pays the tax and half of the fines in full and accepts the assessment. And there is a ceiling of a different kind: the Code treats an understatement of more than GEL 100,000 as tax evasion, which is dealt with under criminal law. At that level the matter is no longer one for an article.

Not registering for VAT when the threshold is passed

A business must apply for VAT registration once its taxable turnover exceeds GEL 100,000 in any continuous 12 months. At the time of writing the Code gives two working days from the day the threshold is passed, and the duty to charge VAT starts with the transaction that crossed it. Carrying on without registration is fined at 5% of the VAT-taxable transactions, other than exempt ones, made in the unregistered period. Where that fine applies, the fines for a late or understated VAT return are not added for the same periods. The VAT itself is still due, with interest. If GEL 40,000 of taxable sales fall into the unregistered period, the fine is GEL 2,000 before any tax is counted. Our article on VAT registration covers what counts towards the threshold.

Fixed fines, and when a warning replaces them

The Code names the breaches for which a warning may be given instead of a money fine, provided the breach is not a repeat. A repeat is the same act within 12 months of the earlier one being detected. The list includes the registration rules, the waybill rule, the register of hired employees and the general GEL 100 fine. It does not include the fines for late or incorrect returns. The word in the Code is may: the officer decides. Three other reliefs exist. An officer may, in cases the Minister of Finance defines, set a period for putting a breach right without drawing up an offence report. The tax authority, the dispute body or a court may release a good-faith taxpayer from a sanction where the breach came from a mistake or lack of knowledge. And nobody is liable for a breach caused by force majeure. None of these is automatic.

How a corrected return before an audit changes the outcome

1. 1

   Find the period and the amount. One wrong month is one corrected return; a year of the same mistake is twelve.

2. 2

   File the corrected return for each period before anything arrives from the tax authority. Once an audit decision or notice has been placed on the portal, a return for that period can no longer be filed, whether or not anyone has opened it.

3. 3

   Pay the additional tax the same day. Interest runs from the original due date and stops only on payment.

4. 4

   Check the taxpayer's card a few days later. The corrected figure, the payment and the interest should be there, and nothing else.

5. 5

   If fines have already been assessed in an audit, look at the 30-day route before it expires: paying the tax and half the fines and accepting the assessment cancels the other half. Accepting an assessment affects any later dispute, so take advice first.

6. 6

   Write a one-page note for the company file: what was wrong, when it was corrected, what was paid. A bank or a buyer will ask one day.

The limitation period is three years from the end of the year

The tax authority has three years to assess tax and three years to impose a fine, and a tax audit is subject to the same three-year period. The period is counted from the end of the calendar year in which the liability arose or the breach was committed, so tax that fell due in May 2026 can be assessed until the end of 2029. It is extended by one year where less than a year remains and the taxpayer files a return, including a corrected one, for that period. A notice placed on the authorised user page before the period expires is in time. Interest is outside this rule and has its own three-year stop. Keep the papers accordingly: the Code requires the documents that establish a tax liability to be kept for three years from the end of the year concerned, and the accounting law requires accounting records and financial statements to be kept for six.

What this article does not answer

It covers the breaches an ordinary small company meets. It does not cover customs offences, excise, cash registers, the loss of a preferential status, or the sector rules for licensed businesses. It does not explain how to dispute an assessment or how an audit runs; our article on tax audits takes that up. It says nothing about your home country, which may tax the same income and has its own penalties. And it is a reading of the Code on one date. We register and look after Georgian companies and read what the Revenue Service sends them. Corrected returns are prepared by an accountant, ours or yours, and a dispute over a material assessment needs an adviser who has seen the file.