Public Advance Tax Ruling

DGN Consulting Launches a Review of Public Advance Tax Ruling

Public Advance Tax Ruling on VAT Exemption for Student Transportation and Catering Services Provided by Educational Institutions

On 29 May 2025, the Minister of Finance of Georgia issued Public Advance Tax Ruling No. 133, which clarifies the application of Article 170(1)(e) of the Tax Code of Georgia in cases where an educational institution provides students with transportation and/or catering services.

This ruling represents an important development for the education sector, as it clearly defines when such services may be exempt from Value Added Tax (VAT) and eliminates legal uncertainties that have existed in practice.

Essence of the Public Advance Tax Ruling

According to the ruling, transportation and catering services provided by an educational institution to its students are considered ancillary services to educational services. As a result, these operations are exempt from VAT without the right to deduction.

The exemption applies only if two key conditions are met:

1️⃣ The service must be provided by the educational institution or on its behalf:

• Transportation and/or catering services must be provided directly by the educational institution or on its behalf.
• If the service is purchased from a third party, it is required that:
• the service is still provided in the name of the educational institution, and
• only the educational institution has the right to charge students for the service.

2️⃣ The service must be substantially connected to the educational process:

Only services that:

• support the proper functioning of the learning process,
• improve conditions for receiving education, and
• are necessary for organizing the educational process

are considered ancillary services.

Based on the above:

• Student transportation (from home to school and back) is regarded as a necessary supporting element of the educational process, as it ensures student safety and continuity of learning.
• Student catering, provided to enhance learning efficiency and student comfort, is also considered an     ancillary service related to education.

Accordingly, both services are exempt from VAT without the right to deduction.

Implications for the Education Sector

This Public Advance Tax Ruling simplifies the tax environment and increases legal transparency in the education sector. It improves financial predictability and reduces tax risks for educational institutions.

What Educational Institutions Should Pay Attention To

To correctly apply this ruling, educational institutions should ensure that:

• contracts clearly state that transportation and catering services are provided in the name of the educational institution;
• accounting records properly classify these operations as ancillary services related to education;
• existing service contracts are reviewed to ensure compliance.

How DGN Consulting Can Help

DGN Consulting is ready to assist educational institutions with:

• analysis of service agreements;
• correct application of VAT exemption conditions; and
• ensuring compliance with the requirements of the Tax Code of Georgia.