Investor to Enjoy Tax Privileges for the Construction of Olympic Village
Investor will enjoy tax privileges for the construction of Olympic village; it is envisaged in the draft-law about Promotion of Olympic Movement initiated at the Parliament of Georgia.
According to the draft-law, investor shall construct Olympic village, all facilities necessary for the organization of Olympiad and youth festival based on the agreement signed with the government.
The same agreement obliges the investor to construct facilities necessary for the functioning of free industrial zone and special trading zone of the custom warehouse in the territory of the Olympic village and to create similar zones there.
Additionally, the Investor will be able to enjoy all rights of registered legal entities in Georgia and to independently attract additional investments for the construction in case of necessity.
The agreement also clarifies who shall receive the Olympic buildings for free during the Olympic tournaments. As for tax privileges, the investor will be free from VAT and import taxes within 10 years after the launch of the construction. More precisely, the investor will not have to pay tax for the import of vehicles, machines, (except cars) and other mechanical equipment which are necessary for the construction.
The investor shall not pay taxes for the import of equipment, furniture and other gadgets for the functioning of 5 star hotel in the Olympic village whose construction is envisaged in the contract. However, the government will draft the list of furniture and gadgets to be imported for the hotel.
The investor will be free from income tax and dividend fines.
In addition, the draft law clarifies that VAT on the goods and service purchased in Georgia will be recovered to the investor based on the instruction of the Minister of Finances. But, the taxes on the estate and land in the territory will be estimated according to the tariff of the local self-government. However, the investor will not pay the property and land tax for the next 5 years after the construction starts.
Investor contractor, which will directly implement the work, shall also enjoy tax privileges. The contractor will be free from the income tax for the next 10 years in the part of received/expecting reimbursement of the investor. However, in 10 years the investor and contractor will not be able to compensate their damage for the previous year.
If the investor sells the property to a new owner, the privileged tax regime will work only during the construction period. The Ministry of Finances is author of the draft-law and it was initiated by the government. The parliament has not started its discussion yet.
The European Youth Olympic Festival will take place in Tbilisi in 2015.
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