Legislative changes concerning the administration of pension penalties give businesses an opportunity to continue operating under more normal conditions, but their effectiveness will depend on implementation, according to Zurab Dznelashvili, founder of Tax & Legal Solutions.
Dznelashvili told BMG that the draft law does not clearly define how ongoing disputes should be handled by courts or the Pension Fund. He suggests suspending current disputes until December 31, 2026 and terminating them if a company uses the amnesty and pays its outstanding debt. He also says the new term “participant’s lost benefit” is appropriate, as delayed contributions prevent employees from receiving investment returns.
The lawyer, however, questions the proposed calculation mechanism, which links the charge to the National Bank’s refinancing rate plus 5 percentage points and references the previous day’s benefit. He says the formula may be difficult for businesses to understand and could potentially be interpreted as allowing interest to accrue on interest, which he considers an issue requiring clarification.
Under the proposed rules, already paid fines will not be refunded, while companies will not need to submit a separate application for the amnesty. The Pension Fund will automatically cancel eligible fines once outstanding debt is paid. Enforcement procedures will be suspended until December 31, 2026; companies that fail to settle their principal debt by then will lose the amnesty and enforcement will resume. As of September 9, 4,673 employers owed GEL 23.5 million in pension contributions and charges and had GEL 13.4 million in fines.
