Support to Public Ruling Drafting

Project Description:

The objective of this assignment is to provide technical assistance and increase the capacity of the Ministry of Finance to issue public rulings.

PMCG will assist the Ministry of Finance to develop and introduce procedures for issuing public rulings and drafting first public ruling documents under the USAID-funded Governing for Growth (G4G) project.

As part of the assignment, PMCG will work to review, update and prepare recommendations on the draft ministerial decree on public rulings issuing procedures. Recommendations will cover technical and legal aspects of the draft decree.

The PMCG team will develop the first public ruling on taxation of agricultural activity. More specifically, profit tax exemption for part of the profits gained from agricultural activity reinvested within three years of the end of relevant fiscal year.

PMCG will evaluate technical and legal aspects taking into consideration international best practices. The public ruling draft will be discussed with representatives of the private sector.

Background information:

According to article 461 of the Tax Code, on the basis of the decision made by a dispute resolution body or under the initiative of the tax authorities, the Minister of Finance of Georgia shall issue a public ruling. The public ruling should be issued based on an analysis of the current practice of taxation.

A public ruling shall be a normative administrative-legal act and shall be published on the official website of the Legislative Herald (“Matsne”). Fulfillment of the public ruling should be mandatory for tax authorities. Furthermore, a taxpayer shall be charged neither an additional tax nor a sanction stipulated under the Tax Code for transactions effected thereof in accordance with the public ruling. The rule of issuing a public ruling shall be prescribed by the Minister of Finance of Georgia.

There is no experience of public ruling issuing in the Ministry of Finance. PMCG will provide technical assistance to the Ministry of Finance in drafting of procedures for issuing of public rulings as well as in drafting the first public ruling document. The first public ruling will cover taxation of agricultural activity. More specifically, profit tax exemption for part of the profits gained from agricultural activity reinvested within three years of the end of the relevant fiscal year.

Follow the links below for more detailed information:
Governing for Growth in Georgia (G4G)
Support to Approximation of Georgian VAT Rules with EU VAT Legislation
Simplification of Tax Code
USAID Georgia, Economic Prosperity Initiative – Assessment of Georgia-United Arab Emirates Double Taxation Treaty