What does the new annual transfer pricing reporting obligation mean for companies?
Georgian companies that carried out international controlled transactions in the previous tax year (2025) and whose total value of such transactions exceeded GEL 500,000 are now subject to an additional reporting obligation.
This requirement arises from amendments dated February 24, 2026, introduced to Order No. 996 of the Minister of Finance of Georgia.
Specifically, such Georgian companies (or Georgian Permanent Establishments of foreign companies) must submit, together with the March Corporate Income Tax (CIT) return (or the annual profit tax return, where applicable), the form titled:
“Information on International Controlled Transactions Provided for by Articles 126–129¹ of the Tax Code of Georgia.”
The GEL 500,000 threshold also includes:
- remaining balances of receivables and payables arising from controlled transactions (this likely refers to receivable/payable balances carried forward from previous years),
- free-of-charge controlled transactions, and
- barter controlled transactions.
In practical terms
If in 2025 your company conducted controlled transactions exceeding GEL 500,000 (including outstanding receivable/payable balances), you are required to complete the new annex to the March CIT return and disclose detailed information about these controlled transactions.
This includes indicating whether transfer pricing documentation has been prepared by the company.
It should be noted that under Georgian transfer pricing rules, an international controlled transaction refers to a business transaction conducted:
- with an associated foreign company, or
- with any person resident in an offshore (tax haven) jurisdiction.
To learn more about transfer pricing documentation and transfer pricing rules in Georgia, you may read additional articles available on our website.
In other words, if in 2025 your company carried out at least one of the following transactions with a related foreign company or/and an offshore entity:
- purchase or sale of goods
- receipt or provision of services (including financial services, such as loans)
- receipt or payment of royalties
- any other type of business transaction (including transfer of business activity)
and the total value of such transactions exceeded GEL 500,000 in 2025 (including outstanding receivable/payable balances with these parties), you must submit this report to the Georgia Revenue Service together with the March 2026 corporate income tax return (for companies operating under the Estonian corporate tax model).
In this report, companies must disclose detailed information about the controlled transactions, including:
- details of the counterparty,
- the nature of the related-party relationship (criteria under which the parties are considered associated),
- the list and volume of controlled transactions,
- the start date of the transactions, and other relevant information.
In my view, one of the most important aspects of the new annex is that companies must also declare whether transfer pricing documentation has been prepared by them.
In other words, when submitting the March 2026 Corporate Income Tax return, companies must indicate whether they:
- already possess transfer pricing documentation (Transfer Pricing Report), or if not,
- plan to prepare such documentation in the future.
Quotation from the relevant legal provision regarding confirmation of transfer pricing documentation preparation
“Column 10 – information on possession of documentation related to the evaluation of controlled transactions (I have / I do not have / in preparation / I intend to prepare).”
New transfer pricing obligations in Georgia: What impact can be expected?
In my opinion, the main consequence of this change will be a significant increase in transfer pricing inspections by the Georgia Revenue Service.
This is because the tax authority will now have direct information about companies conducting international controlled transactions, making it easier to identify:
- companies that may be subject to potential tax inspections related to transfer pricing, and
- companies that may fall under increased monitoring.
In my view (this is a personal opinion), starting from April 2026, companies that indicate in the annex that they do not have transfer pricing documentation prepared may face increased scrutiny from the tax authorities.
The reasoning is straightforward.
If transfer pricing documentation has not been prepared, it is likely that the company has not conducted a detailed analysis of its transfer pricing arrangements. As a result, the probability that prices applied in controlled transactions do not comply with the arm’s length principle may be higher than in cases where such documentation has already been prepared.
Preparing high-quality transfer pricing documentation generally involves:
- in-depth analysis of controlled transactions
- risk assessment
- benchmarking studies
- implementation of appropriate corrective measures
At the same time, the tax authority may also show interest in companies that declare that transfer pricing documentation has already been prepared, and may request these Transfer Pricing Reports for review.
Key conclusion: What does this Transfer Pricing legislative change mean for companies operating in Georgia?
The key takeaway from this legislative amendment is that the Georgian tax authority is strengthening its control over transfer pricing matters.
Through this reporting requirement, the Georgia Revenue Service will be able to more easily identify companies conducting international controlled transactions, which are potential candidates for transfer pricing audits by GRS.
Until now, the tax authority of Georgia has not had systematically organized information about Georgian companies engaged in controlled transactions.
There are reasons to believe that this new reporting requirement may lead to:
- a increase in transfer pricing audits, and
- more frequent requests for transfer pricing documentation by the Georgia Revenue Service.
The Revenue Service has also announced this legislative update:
https://rs.ge/LawNewsArchive?newsId=1711
Note: This article is provided for informational purposes only and does not constitute legal or tax advice.
About the author
The author of this article is Gela Barshovi, a tax consultant and transfer pricing specialist, and the founder of TPSolution.
Transfer Pricing Support in Georgia
If your company conducts transactions with foreign related companies or offshore entities, it is likely subject to Georgian transfer pricing rules and may have an obligation to prepare transfer pricing documentation, provided that the volume of such controlled transactions is not immaterial.
Our team provides professional assistance with:
- preparation of transfer pricing documentation (Transfer Pricing Reports)
- risk assessment of controlled transactions
- support during tax audits and transfer pricing inspections
- advisory on Georgian transfer pricing compliance
📩 Contact us for professional consultation: [email protected]
or fill out the contact form on our website, and we will get back to you shortly: https://tpsolution.ge/contact/