Georgia, the country in the Caucasus, not the U.S. state, is one of the more commonly confused names in tax research. This guide is about the Republic of Georgia: wedged between Russia, Turkey, Armenia, and Azerbaijan, with its own tax code, its own currency (the Georgian lari, ₾), and a genuinely unusual approach to corporate tax. If you're planning a gifting programme for a Georgian team, here's the short version up front: there is no tax-free allowance for employee gifts in Georgia. Every gift is taxed.
Employee gifts: no exemption, taxed at 20%
Georgia's tax rules don't carve out gifts, whether for a holiday, a work anniversary, or no occasion at all. Any non-cash benefit an employer gives an employee is treated as ordinary employment income, valued at its market price, and taxed at Georgia's flat 20% personal income tax rate. There's no annual threshold to plan around and no excess-only mechanic where only the amount above some line gets taxed: the full market value of the gift is added to the employee's taxable income from the first lari.
Cash gifts get exactly the same treatment. It's tempting to assume cash and non-cash gifts are handled differently, since that's true in plenty of other countries, but Georgia doesn't distinguish between them on rate or exemption. The only practical difference is how the value is determined: a cash gift is valued at its face amount, while a non-cash gift, merchandise, a hamper, a voucher, is valued at market price. Both are taxed at the same flat 20%, and neither gets a de minimis carve-out.
Georgia's unusual corporate tax model changes the client-gift question
Most guides in this series ask the same question for every country: can a company deduct the cost of a client gift against its corporate income tax? In Georgia, that question barely applies, because Georgia doesn't tax corporate profit the way most countries do.
Since 1 January 2017, Georgia has run what's usually called an "Estonian-style" corporate tax model. Under it, a company's profit is taxed at 0% for as long as it stays inside the business: reinvested, retained, whatever you want to call it. The standard 15% corporate income tax rate only applies when profit actually leaves the company, either as an ordinary dividend distribution or as one of a defined list of "deemed distribution" events that the tax code treats the same way even though no dividend was formally declared.
That reframes the entire client-gift question. Under a traditional corporate tax system, you'd ask: "is this gift a deductible business expense?" In Georgia, for a company that isn't distributing profit, there's no annual deduction question to answer in the first place, there's no profit being taxed yet to deduct anything from. The real question becomes: "does giving this gift count as a deemed distribution, and does it trigger an immediate 15% tax event?" That's a fundamentally different framing, and it's the one the rest of this guide is built around.
12 gift ideas
Whatever the tax mechanics, gifts still need to actually be good. Here are 12 branded merchandise options, priced in Georgian lari (₾), with materials, branding methods, and minimum order quantities.
1. Hoodie – The Rex
A heavyweight 280 gsm organic cotton hoodie that gets worn long after any gifting occasion is forgotten, and one of the most popular items in the catalogue.
- Material: 90% organic cotton, 10% polyester.
- Branding: embroidery, print, or patches.
- Order: MOQ 100 · from ₾116/unit.
2. Sports Socks
A low-cost, high-smile item that works well for a whole-team gesture without much per-head budget.
- Material: 80% cotton, 17% polyamide, 3% elastane.
- Branding: knitted-in logo zones.
- Order: MOQ 100 · from ₾12/unit.
3. Recycled Steel Bottle
A double-walled bottle made from recycled steel: genuinely useful, and a sustainability talking point in one gift.
- Material: recycled stainless steel.
- Branding: laser engraving or print.
- Order: MOQ 50 · from ₾32/unit.
4. A5 Notebook
A well-made notebook still earns its place on most desks, whether for meeting notes or as a simple desk accessory.
- Material: FSC-certified paper, PU cover.
- Branding: debossed or printed logo on the cover.
- Order: MOQ 100 · from ₾13/unit.
5. Premium Tote Bag
A sturdy tote leaves the office with people, on the commute, at the market, giving the branding real visibility relative to its price.
- Material: 270gsm cotton.
- Branding: print or custom straps.
- Order: MOQ 100 · from ₾19/unit.
6. Knitted Scarf
A genuinely useful winter gift, with woven branding that reads as a step above a printed logo.
- Material: 80% viscose, 20% polyester.
- Branding: woven label.
- Order: MOQ 100 · from ₾22/unit.
7. Baseball Cap
A reliable pick for outdoor events and company outings; an embroidered logo tends to look more premium than the price tag suggests.
- Material: 100% cotton.
- Branding: embroidery.
- Order: MOQ 100 · from ₾24/unit.
8. Espresso Mug
A good espresso mug earns daily use at the office coffee machine, putting a logo somewhere people see multiple times a day.
- Material: glazed ceramic, dishwasher and microwave safe.
- Branding: printed or laser-etched logo.
- Order: MOQ 108 · from ₾25/unit.
9. Bamboo Tea Bottle
A bamboo exterior over a durable stainless steel interior gives a warmer look than an all-metal bottle, and works well as a mid-range gift.
- Material: stainless steel, bamboo.
- Branding: laser engraving or print.
- Order: MOQ 50 · from ₾54/unit.
10. RollTop Backpack
A water-resistant backpack with a laptop compartment that quickly becomes someone's everyday bag: a natural pick for a bigger single gift, such as a milestone anniversary.
- Material: GRS-certified recycled PU, water-resistant.
- Branding: print or embroidery.
- Order: MOQ 25 · from ₾71/unit.
11. Noise-Cancelling Headphones
A genuine step up in perceived value, and one of the pricier items on this list, so it's best reserved for a milestone gift rather than a routine one, especially since its full value counts toward taxable income either way.
- Material: recycled ABS, ANC + ENC, foldable.
- Branding: digital print or doming.
- Order: MOQ 50 · from ₾71/unit.
View Noise-Cancelling Headphones →
12. Wireless Powerbank
A magnetic wireless powerbank in recycled ABS plastic is genuinely useful for any commute or business trip, and a practical mid-range choice.
- Material: recycled ABS plastic.
- Branding: pad print or digital print.
- Order: MOQ 50 · from ₾53/unit.
The 1% representation-expense rule for client gifts
Client and business-partner gifts are generally absorbed as ordinary representation expenses, the cost of doing business, without triggering any tax event, as long as two conditions hold. First, the gift has to be genuinely business-related: tied to actual economic activity, not a gift that looks like a disguised profit distribution to a shareholder or related party dressed up as client hospitality. Second, total representation expenses for the year have to stay within a cap of 1% of the company's prior-year total income. Loss-making companies use 1% of prior-year expenses instead, and brand-new companies with no prior year to reference use 1% of current-year expenses.
Stay inside that cap, and stay genuinely business-related, and a client gift is just a normal cost of doing business: no 15% tax event, nothing to report as a distribution. Exceed the cap, or fail the genuine-business-activity test, and the gift, or the portion of representation spend that pushes the company over, gets reclassified as a deemed distribution. That means it's taxed at 15% on a grossed-up basis, exactly like an ordinary dividend. For a company operating under the 0%-while-retained model, that's a meaningfully worse outcome than simply losing a deduction: it's an active tax bill triggered by the gift itself.
VAT on gifts
Georgia's standard VAT rate is 18%, with a registration threshold of GEL 100,000 in turnover over a 12-month period. For a registered business, giving something away for free doesn't automatically trigger VAT. It only does if the company previously claimed input VAT when it acquired the goods being gifted. In that case, the free supply is treated as a deemed supply and VAT is charged, but on the item's cost, not its market value, effectively clawing back the input VAT credit the company already claimed.
If no input VAT was ever claimed on the gifted goods in the first place, giving them away free doesn't create an output VAT liability at all. There's also a reported small-gift or sample threshold, reportedly around GEL 50 per recipient per year, below which gratuitous supplies aren't VATed even if input VAT was claimed on them. Treat that figure as a reasonably confident estimate rather than a hard, citable rule: it's the kind of threshold worth confirming with a Georgian tax advisor before relying on it for a specific gifting programme.
Common mistakes
- Asking the wrong question entirely. In a traditional corporate tax country, the question for a client gift is "is this deductible?" In Georgia, under the Estonian-style model, retained profit is taxed at 0%, so there's frequently no annual deduction question to ask at all. The real question is whether the gift counts as a deemed distribution and triggers an immediate 15% tax event.
- Blowing through the 1% representation cap without realizing it. Client gifts inside the 1%-of-prior-year-income cap, and genuinely business-related, are absorbed as ordinary expenses. Exceed that cap, and the excess gets reclassified as a deemed distribution, taxed at 15% on a grossed-up basis, the same as a dividend.
- Assuming a non-cash employee gift avoids tax the way it might elsewhere. Some countries treat in-kind gifts more leniently than cash. Georgia doesn't: both are taxed as ordinary employment income at the full flat 20% rate, with no exemption and no favorable distinction for merchandise over cash.
This article is general information, not tax or legal advice. Georgian tax law can change, and individual circumstances vary, so confirm the current rules with a local tax advisor before running a gifting programme.
This guide is part of our complete country-by-country series. See Employee Gift Tax Rules by Country: The Complete 2026 Guide for all countries.
Planning a gifting programme for your Georgian team? Talk to Sunday about sourcing, branding, and shipping any of the items above, from a single small batch to a company-wide rollout.
