Georgian Dream Initiates Draft Law for Tax Exemption on Offshore Asset Transfers
By Liza Mchedlidze
Thursday, April 18, 2024
Members of the Georgian Dream party have introduced a draft law proposing changes to the tax code. Concurrently with the review of the 'Agents Law', the Georgian Parliament will expeditiously consider it.
These amendments aim to exempt Georgian enterprises and their partner natural persons from taxation on income received when a company registered in a jurisdiction with preferential taxation (offshore zone) transfers to Georgia. The Parliament has already endorsed these legislative changes during its plenary session on April 17.
With these amendments, the favorable conditions for transferring enterprises from offshore zones will remain in effect until January 1, 2028.
The draft law aims to encourage moving assets from offshore places to Georgia, according to its creators.
Opposition MP Roman Gotsiridze criticized the proposed draft law, saying that it gives Bidzina Ivanishvili the ability to bring his assets, including those "hidden" offshore, into Georgia without paying taxes or following anti-money laundering laws. Gotsiridze stated that Ivanishvili, the founder and honorary chairman of Georgian Dream party, proposed these changes because of the looming sanctions.
"The law only applies to him because one individual must own 100 percent of the offshore assets.
Now it has become clear why the National Bank bought 7 tons of gold worth half a billion dollars and why it is being brought to Georgia for storage.
He was awaiting sanctions!
He doesn't even have a place to run to; he plans to turn the country into his personal castle," Gotsiridze stated.
Expert Gia Khukhashvili stated that there might be an influx of Russian illicit funds into Georgia, potentially leading to Western sanctions on the country's financial system. According to him, this could align Georgia economically with Russia. Khukhashvili also speculated that the aggressive enforcement of 'Foreign Agents' law may be aimed at demonstrating control to Putin.
"We may see the entire Russian black money in Georgia.
This will naturally eventually cut the ways to the West, as they will be forced to sanction our entire financial and banking system. Accordingly, we naturally become a part of the Russian Empire.
I do not rule out that the main purpose of adopting the 'agents' law in such an aggressive manner is the following - someone is trying to show Putin that he controls everything and his assets will be reliably protected here." Khukhashvili wrote.
