Georgia

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Phase 2 Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Foreign companies with sufficient nexus to Georgia (e.g. being resident for tax purposes) and foreign partnerships that are carrying on business in Georgia are not required to maintain nor provide to the authorities ownership information in all cases.  Georgia should ensure the availability of ownership information of foreign companies with sufficient nexus to Georgia and foreign partnerships that are carrying on business in Georgia in all cases. 
Georgian law does not ensure that information is available identifying the settlors and beneficiaries of a foreign trust with a Georgian trustee or trust administrator in all cases.  Georgia should ensure that information identifying the settlors and beneficiaries of foreign trusts, which are administered in Georgia or in respect of which a trustee is resident in Georgia, is available. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  Georgia had limited oversight of the compliance by (i) joint stock companies and Securities Registrars with their obligation to maintain accurate and updated information share registers and (ii) general partnerships with their obligation to maintain an updated partnership agreement during the review period.  Georgia should ensure that the obligation imposed on joint stock companies and general partnerships to maintain updated ownership information is sufficiently monitored in practice. 
   
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The scope of legal professional secrecy found in the domestic legislation is broader than the international standard as it is not limited to “confidential communications” between a client and an advocate, but it extends to any information which became known to the advocate during the exercise of legal practice. The scope of professional privilege applicable to accountants is also broader than the international standard.  Georgia should ensure that the scope of professional secrecy is consistent with the standard. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  The court procedure to access banking information has been introduced after the review period and has not been sufficiently tested in practice, In the one case where it has been used, the Georgian authorities have successfully accessed the information and responded to the EOI request within 11 months.  Georgia should monitor the implementation of the new procedure to access banking information to ensure that this procedure allows it to effective exchange information in practice. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Georgia should continue to develop its exchange of information network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The EOI agreements of Georgia do not define the term "professional secret" and the scope of legal professional secrecy found in the domestic legislation would be applicable. This is broader than the international standard as it is not limited to “confidential communications” between a client and an advocate, but it extends to any information which became known to the advocate during the exercise of legal practice. The scope of professional privilege applicable to accountants is also broader than the international standard.  Georgia should ensure that the scope of professional secrecy is consistent with the standard. 
Phase 2 Rating Factors Recommendations
Largely Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Compliant.     

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.