2 December this year the minister of Finance of Georgia has published the Decree #366 on amending the Georgian transfer pricing decree #423 dated 18 December 2013.
The decree #423 is a main legislative source of Georgian transfer pricing legislation besides the few article of Georgian tax code making reference to it. The decree explained that if some issue is not described in this document, the reference to OECD transfer pricing guideline 2010 shall be made. In other words, OECD TP guideline 2010 had power of law in Georgia with regard to transfer pricing issues not-described in the local transfer pricing rules.
Since this month, based on the changed made by decree #366, the reference is made to OECD TP guideline 2017 instead of 2010 version. Meaning that all BEPS outcome regarding the transfer pricing topic (e.g. updated chapter one of TP guideline), is already reflected in Georgian transfer pricing legislation.
For your information, articles of transfer pricing have been embedded in Georgian tax code since January 2011. However, those articles made reference to the decree of ministry of finance which has not been published until the end of 2013. Since then, Georgia has full transfer pricing legislation, however the practical application the TP law has started by Georgian tax administration since 2015 after the special transfer pricing division has been established. Since the end of 2013 until this month the country’s TP law made explicit reference to OECD TP guideline 2010 which has been replaced by OECD TP 2017 version this month.
This article has initially been published on MNETax NEws