The Ministry of Finance of Georgia and the Embassy of Japan in Georgia have reached an agreement on a law to prevent double taxation in Georgia and Japan.The Convention between Georgia and Japan for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance’ will replace the tax convention between the government of Japan and the government of the Union of Soviet Socialist Republics for the avoidance of double taxation with respect to taxes on income which entered into force in 1986.
Henceforth, the double tax convention between Georgia and Japan will be based on the new document, which will promote enhanced economic cooperation between the two countries and attract investment.
According to Geostat, foreign direct investment of 68.3 million USD has flowed from Japan to Georgia in the last 5 years. The volume of FDI in different sectors was different over the years.
2016 - 5.8 million USD:
• Trade - 5.6 million USD;
• Other sectors - 216.1 thousand USD.
2017 - 18.3 million USD, an increase over the previous year - 214.8%:
• Real estate - 264.6 thousand USD;
• Trade - 18.3 million USD;
• Other sectors - -222.9 thousand USD;
2018 - 4.8 million USD, a decrease of 73.6% compared to the previous year:
• Real estate - 205.3 thousand USD;
• Trade - 4.6 million USD;
• Other sectors - 21.9 thousand USD.
2019 - 39.5 million USD, an increase of 716.3% compared to the previous year:
• Hotels and restaurants - 4.5 thousand USD;
• Real estate - 406.7 thousand USD;
• Trade - 39.2 million USD;
• Other sectors - -99.0 thousand USD.
As for Q1- Q2 of the current year, the volume of investments from Japan in 2020 became negative, mainly due to the outflow of investments in the trade sector. In total, the volume of investments in Q1-Q2 of 2020 amounted to 259.1 thousand USD. According to the sectors, the investment is as follows:
• Hotels and restaurants - 1.9 thousand USD;
• Real estate - 194.8 thousand USD;
• Trade - -12.5 million USD;
• Other sectors - 12.1 million USD.
