Georgian Parliament overrides president's veto on offshore law
Georgia overrides offshore law veto
The Georgian Parliament did not consider the president’s substantiated remarks presented during the veto procedure on the offshore law and thus overrode the veto. In her remarks, Georgian president Salome Zourabichvili noted that the legislative changes to the tax code pose serious political and economic risks and should not be adopted in an expedited manner.
A total of 64 deputies voted against the president’s veto. After the veto was overridden, 83 deputies supported the adoption of the original version of the law.
According to the amendment to the tax code, it is proposed to write off tax debts and penalties accumulated before January 1, 2021, as well as to provide tax benefits for transferring assets out of offshore zones.
The same amendment establishes tax benefits in the case of transferring assets to a Georgian enterprise from a company registered in a low-tax jurisdiction (offshore):
a) In the case of asset transfer operations, the income received by the offshore-registered foreign company and its individual owner is exempt from profit and income taxes.
b) The import of assets or goods into Georgia is exempt from import duties.
c) The Georgian enterprise receiving assets from offshore is exempt from property tax until January 1, 2030.
According to Paata Kvizhinadze, the chairman of the Finance and Budget Committee, the bill being considered in an expedited manner does not concern the offshore property of Bidzina Ivanishvili [an oligarch, honorary chairman of the ruling party “Georgian Dream,” who is considered shadow ruler], a point with which the opposition disagrees.
The opposition believes that the adoption of the bill is connected to potential sanctions against Bidzina Ivanishvili.
