Georgia has introduced new regulations governing the VAT treatment of barter transactions, particularly those involving real estate, under a public ruling issued by the Ministry of Finance.
The amendment clarifies how the taxable amount should be determined when a transaction includes a combination of cash and non-cash consideration, an area that has been a frequent source of tax disputes.
Under the new rules, VAT is calculated based on the value of the compensation received or to be received, excluding VAT. Parties involved in a barter transaction must therefore assign a monetary value to the exchanged assets or services.
The regulation also states that when an independent appraisal shows the market value of the received property is lower than the agreed transaction price, the contractual transaction value will be used for VAT purposes, provided the deal was concluded under market conditions and there is no indication of artificial price manipulation. The changes took effect on May 20, 2026.
