Tbilisi, Georgia, January 23, 2014
—The Investment Climate Advisory Services of the World Bank Group has helped the Georgian government streamline international taxation procedures to improve transparency, protect tax revenues, and boost investor confidence.
The Georgia Investment Climate Project has helped Georgia’s Ministry of Finance develop a legal framework and will now help implement new transfer pricing rules. Transfer pricing is usually applicable when two related companies—such as a parent company and a subsidiary, or two subsidiaries of a common parent—trade with each other, so the new rules help the government ensure fair taxation and foster an attractive investment climate.
Nodar Khaduri, the Minister of Finance of Georgia, said: “The new rules in international taxation will help companies comply with transfer pricing regulations easily, while also ensuring public interests are protected. This is a step forward in our efforts to support private sector development in Georgia.”
The new rules allow companies to seek advance pricing arrangements, giving the private sector more clarity on transfer pricing matters. The rules are in line with the best practices of the Organization for Economic Co-operation and Development and provide guidance on issues of major concern to developing countries, providing a high level of certainty for investors regarding their obligations in Georgia.
“Multinational companies often face challenges in cross border taxation. Therefore streamlined and clear procedures in this area serve as a good stimulus for foreign investors,” said Thomas Lubeck, IFC Regional Manager for the South Caucasus. “Our support in creating simple, efficient and business-friendly regulations is aimed at reducing the cost of doing business and attracting more foreign investment to Georgia.”
The regulations will be published in English as well as Georgian, for maximum coverage among foreign investors, and the Georgia Investment Climate Project will offer training to private companies on the consequences of the new rules.
The Georgia Investment Climate Project is implemented by IFC, a member of the World Bank Group, in partnership with the Federal Ministry of Finance, Austria, BP and its Oil and Gas Co-venturers, and the Norwegian Trust Fund for Private Sector and Infrastructure.
About the Investment Climate Advisory Services of the World Bank Group
The Investment Climate Advisory Services of the World Bank Group helps governments implement reforms to improve their business environments and encourage and retain investment, thus fostering competitive markets, growth, and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over 15 donor partners working through the multidonor FIAS platform.
For more information about the Ministry of Finance of Georgia, please, visit:
www.mof.ge
.
For more information about BP and its Oil and Gas Co-venturers, please visit:
www.bp.com
.
For more information about, the Norwegian Trust Fund for Private Sector and Infrastructure, please visit:
www.worldbank.org/ntfpsi
.
