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Georgian Company not to Pay VAT for Advertising Services Made Abroad via Google System

Georgian  company will not pay VAT for advertising services made abroad via Google system.

Namely, the issue is of Alter Way company, which has applied to  due instances for exemption from VAT payment.

A part of websites created by them are designated for only foreign consumers, where Google AD system is applied that acts as a certain mediator between the AD customer and the company.

“We had considerations that services were performed abroad and we were to pay only profits tax, not VAT tax.

Today many physical bodies are engaged in this business. The topic was very complicated and it took much time to resolve it”, Giorgi Romanadze, business development director of the company told the Business Contract.

“The case with our company has proved that revenues from Google is exempted from VAT if there is foreign traffic”, the company representatives noted.

Google has not introduced its own advertising service in Georgia, however, this is a widespread method abroad, because on behalf of customers the company generates interesting advertisement schemes and this is more efficient compared to traditional advertisement.

“Georgia has much potential for developing social advertisement. Customers realize that real results are received from digital marketing too and this is far cheaper compared to television. When we undertook this business, companies were afraid of putting money. Now the situation has changed. Digital marketing enables to spend money on people who create certain segments”, Giorgi Romanadze said.

“We use Google system for Advertising. It was disputable whether our service was an advertising service, because, as a rule, advertising services performed abroad are exempted from VAT. IT was confirmed that we provide advertising activities and we are not to pay VAT”, the company representatives said.

Meanwhile, the company will become the second partner of Google in Georgia in about a month.