ISAR-Georgia has translated this legislation as a service to the English-speaking community of Georgia. ISAR-Georgia takes no legal responsibility for assuracy of the translation, and encourages you consult the official Parliamentary version, when it becomes available in English.













LAW OF GEORGIA ON GRANTS

Article 1. Application sphere
The given law determines general principles of giving, receiving and applying grants in Georgia.
1. Grants represent special-purpose, free assistance in a financial or material form, granted by the grantgiver (donor) to the grant receiver,to be used for the realization of concerete humanitarian, educational,scientific-research, health care, cultural, sports, ecologicala and social projects, along with programs of state or public importance.
2.Financial assistance granted for profit or political means are not considered a grant.
Article 3. Grant giver
Grant giver (donor) could be:
1.An international charity, humanitarian or other public organization (including international sports association, federations and committies), a financial-credit institution, a foreign government or its representation, as well as a foreign, non-profit juridical person (faundation).
2. A non-profit, juridical person (foundation, program) of Georgia, whose main goals, as defined by a scientific-research or other public welfare activites.
Aricle 4. Grant receiver
Grant receiver could be
1. State of Georgia, represented by the boby (organization) and authorized by the President.
2. Georgia's state and local self-governing bodies.
3. A non-profit, juridical person (either resident or non-resident of Georgia), its representation, branch, or department.
4. Citizen of Georgia
    CHAPTER 2 -GENERAL PRINCIPLES OF GRANT-GIVING
Article 5. Legal basis for grant-giving.
1. Legal basis for grant-giving is a written agreement between grant-giver (donor) and grant recipient, as well as an official, written decision on granting special-purpose material or non-material values (including financial aid) to Georgia's sports federations or clubs. The purpose of the grant, its amount, the concrete direction, as well as basic demands put forward by the grant-giver (donor) to the recipient should be articulatid in the agreement.
2. The grant could be used only for the purposes articulated in the agreement. Use of the grant for any other purposes is allowed only with the permission of the grant-giver(donor)
3. Realization of value reccived through a grant is allowed only in the case in which such activities were articulated in the grant-giving agreement.
Article 6. Violation of agreement regulations and liability
1. According to the active legislation,parties are liable for violating the regulations articulated in the agreement.
2.In the case of a dispute arising between the resindent juridical persons or citzens of different countries,it is to be solved according to the judicial rules of the country chosen by the parties in advance.If such argreement is not determined prior,the dispute will be solved in accordance with the legislation of Georgia.
    CHAPTER 3
Article 7. General rules of grant taxation
Grant taxation rules are determined by the active legislation in Georgia.
Article 8. Law enactment
The given law enacted from the moment of publication.

LAW OF GEORGIA ON GRANTED GOODS AND INCOME

With the aim of regulating taxation of goods and income granted to the Georgian residents by international charity, humanitarian and other public organizations, as well as a foreign government, juridical or physical person, the Georgian Parliament states:
1. The juridical person, as a recipient of the grant within the limits of a program financed and determined by the agreement made with the grant-giver (donor), is free of tax to the joint social security and medical insurance fund, state united employment fund and state traffic fund.
2. Subparagraph (a) of the first paragraph of Article 5 of the Law of the Republic of Georgia of 24 December 1993 on "Value Added Tax" (Bulletin of the Parliament of Georgia. 1993.N 12-13,Article 240)is to be statedin the following wording:
"(u): Goods intended for the elimination of the results of natural calamities, accidents and disasters, as well as goods imported through humanitarian aid and grants, goods purchased in Georgia with the means articulated by a grant agreement (Rules of getting imported goods through Georgian customs are determined by the President`s decree. While purchasing goods in Georgia by means of a grant, the grant recipient pays the value-add tax ,which will by reimbursed to him from the budget after presenting the necessary papers to the tax inspection board, within the period of to weeks)".
3.Paragraph (a) of Article 17 of the Law on Georgia`s State Budget of 1996" of 9 February 1996 is to be stated in the following wording:
"(a) Granted goods, as well as goods of humanitarian aid brought to Georgia for the climination of natural calamities, accidens and disasters. Rules of getting the the abovementioned goods through the Georgian customs are determined by the President`s deeree".
4.The first paragraph of Article 7 of the Law of the Republic of Georgia on Manufacturers' Income Tax from 21 December 1993 ( Bulletin of the Georgian Parliament N. 12-13. 1993. Article 233 ) should be appended such that subparagraph (d) reads as following:
"(d) income earned through the financed and regulated activities determined by the arement made by the grant recipient, non-manufacturing,juridical person and the grant-giver (donor) which is used for the purposed envisioned by the grant agreement".
5.Subparagraph "n" of the first paragraph of Article 3 of the Law of the republic of georgia on "Income Tax of Physical Persones" of 21 December 1993 (Bulletin of the Georgian Parliament, N. 12-13, 1993, Article 248) is to be stated in the following wording:
"(n) High schools and post-graduate scolarships, appointed by the schools as well as scholarships or other financial aid granted to physical persons by grant givers (donors)".
6.The given law is to be enacted from the moment of publication.

    Signed,
    Eduard Shevarnadze, President of Georgia
    Tbilisi, 28 June 1996