“Interest is tax-free in Georgia” — true, and still the less important half of the calculation. For anyone resident in Germany, Austria or Switzerland, the tax burden is decided at home, not in Tbilisi. This article separates the two cleanly: what Georgia genuinely does not levy, what falls due at home — and why it is the interest itself that makes a foreign-currency account worse treated in Germany than a non-interest-bearing one.
What Georgia does not levy
Georgia has a general five percent withholding tax on interest. It does not reach bank deposits held by individuals: interest paid out by a licensed Georgian financial institution is not cut at source and does not form part of the recipient’s taxable gross income.
In practice that means the gross figure on your statement is also the net figure — from a Georgian perspective. Anyone tax-resident in Georgia is done here. For everyone else, the calculation only begins.
One side effect is worth booking as a positive: because no foreign tax arises, there is nothing to credit and nothing to reclaim under a double-taxation treaty. That spares you the refund procedure familiar from Swiss or Austrian withholding tax. It does not lower your burden — it merely simplifies it.
Which Georgian payments are taxed at source — and why the five percent rule matters a good deal to the owner of a Georgian structure — is covered in withholding tax in Georgia.
The bill at home
| Germany | Austria | Switzerland | |
|---|---|---|---|
| Rate on interest DE: 25 % flat tax plus 5.5 % solidarity surcharge | 26.375 % plus church tax | 25 % | progressive tariff |
| Procedure | Anlage KAP | annual assessment | securities schedule |
| Deducted by the bank a Georgian bank withholds nothing | |||
| Allowance | EUR 1,000 saver's allowance | none | varies by canton |
| Tax on the balance itself CH: wealth tax | |||
| Currency gains taxable | yes, no holding period | only within one year | privately held: generally no |
For Germany the familiar rate applies: 25 percent flat tax plus a 5.5 percent solidarity surcharge on top, 26.375 percent combined, plus eight or nine percent church tax where applicable. Because no domestic institution is involved, there is no automatic deduction — the income belongs in Anlage KAP, and the saver’s allowance only bites in the assessment.
In Austria, deposits held with credit institutions attract the reduced rate of 25 percent rather than the general 27.5 percent — at foreign banks too, again through the assessment, because no withholding can take place.
Switzerland treats interest as ordinary income at progressive rates and additionally taxes the balance through the wealth tax. In exchange, capital gains on privately held assets stay outside the tax base.
The point almost everyone misses
A Georgian account is nearly always a foreign-currency account — in lari, in dollars, or both. Beyond the interest question, that raises a second one: how is the currency gain taxed when the lari appreciates between deposit and withdrawal?
An uncomfortable but clean conclusion follows: a multi-currency account paying 0.25 percent on euro can be worse for a German taxpayer than a non-interest-bearing one — because that quarter of a percentage point lifts the entire balance out of the one-year speculation period and locks it into the capital-income regime permanently. A lari term deposit at ten percent carries that consequence easily; a euro account at 0.25 percent does not.
In Austria the question is defused: currency gains on foreign-currency balances are speculative transactions under section 31 with a one-year period. Hold for more than a year and the currency gain is realised tax-free — regardless of whether the account pays interest.
A worked case
EUR 50,000 converted into lari, fixed for twelve months at ten percent, resident in Germany, church tax set aside:
- Interest in lari: roughly 10 % on the amount deployed Georgia withholds none of it
- Less 26.375 % German tax on the interest 10 % becomes roughly 7.4 %; at this size the saver's allowance covers only a small part
- Plus or minus the currency result on conversion back the euro moved between 2.98 and 3.24 lari during 2026 — around a nine percent range
- A positive currency result is taxable too interest-bearing account, no holding period — it counts as capital income
- A negative currency result can be offset capital losses in the general offset pool, not the equities pool
- Record-keeping: every interest credit is its own acquisition lot the bank will not supply this — budget for the work or choose annual interest
That last line is the practical advice of this article: choose annual rather than monthly interest payment. It cuts the number of acquisition lots from twelve to one per year and is what makes the foreign-currency calculation workable at reasonable effort in the first place. Most Georgian banks offer both variants, and the effective rate differs only marginally.
And if you move?
Then the entire second half of this calculation falls away. Move your centre of life to Georgia and become tax-resident there and the interest is taxed nowhere: Georgia exempts it, and there is no other country of residence left. The automatic-exchange report lapses too, because it only concerns people who are tax-resident abroad. What that takes — and what expressly does not suffice — is in tax residency in Georgia and CRS and Georgia.
While the residence stays put, the simple rule applies: declared or not at all. Which rates are even on the table is worked through for all thirteen banks in deposit rates in Georgia.
Frequently asked questions
Is interest from Georgian bank deposits untaxed in Georgia?
For individuals, yes. Interest paid out by a licensed Georgian financial institution is not subject to withholding at source and does not count towards taxable gross income. Georgia's general five percent withholding tax on interest does not reach bank deposits. For anyone tax-resident in Georgia, taxation ends there entirely.
Do I have to declare Georgian interest in Germany?
Yes, via Anlage KAP. A foreign bank withholds no German capital-gains tax, so no automatic deduction applies — you declare the income yourself. The charge is 25 percent flat tax plus a 5.5 percent solidarity surcharge, 26.375 percent combined, plus church tax where applicable. The EUR 1,000 saver's allowance per person (EUR 2,000 for joint assessment) still applies but only takes effect in the assessment.
Can I credit Georgian tax against my German tax?
There is nothing to credit. Because Georgia levies no withholding tax at all on individuals' bank interest, no foreign tax arises that could be credited — and no double-taxation-treaty refund needs to be claimed. That simplifies the filing but does not reduce the burden.
Are currency gains on a lari or dollar account taxed?
In Germany yes, and more sharply than most expect. Under the tax authority's position in the BMF circular of 19 May 2022, currency gains on an interest-bearing foreign-currency balance fall under section 20(2)(1)(7) of the German Income Tax Act — with no holding period. Every deposit and every interest credit counts as an acquisition, every withdrawal or conversion as a disposal. Only non-interest-bearing balances stay in the section 23 regime with its one-year speculation period.
Is Austria different?
Materially. Interest on deposits held with credit institutions is taxed at 25 percent rather than the general 27.5 percent, declared through the annual assessment. Currency gains on foreign-currency holdings are treated as speculative transactions under section 31 of the Austrian Income Tax Act with a one-year period — hold longer than a year and the gain is tax-free. For long-held foreign-currency balances, Austria is noticeably more favourable than Germany.
What applies in Switzerland?
Interest is ordinary income taxed at the progressive federal, cantonal and municipal rates; the balance itself is additionally subject to wealth tax and belongs in the securities schedule. Capital gains on privately held assets, by contrast, are generally tax-free unless you qualify as a professional trader.
Will my tax office learn about the account?
Yes, as long as you are tax-resident abroad. Georgia has participated in the automatic exchange of information since 2024; account holders, balances and income are transmitted annually to your country of tax residence. Declaring is therefore not a judgement call but a reconciliation that happens either way.
This article is general information and does not constitute legal or tax advice. The German, Austrian and Swiss positions are summarised for the standard case of an account held as private assets; church tax, cantonal tariffs, loss-offset pools and treatment as business assets are left aside. Have your individual situation professionally reviewed before opening an account. Last updated August 2026; rules may change.