Law
Inventory and the law
When an inventory is mandatory in Georgia, how often it should be done, what the tax authority may do, and what a shortage costs — briefly, with sources.
When it is mandatory
Before the annual accounts
Instruction No. 12-03 · Decree No. 70, art. 15
Every year, before the financial statements are prepared. Fixed assets at least once every three years.
When the person responsible changes
Instruction No. 12-03 · Decree No. 70, art. 15
When a storekeeper, cashier or other materially responsible person is replaced — on the day of handover. Under collective responsibility, when the lead changes or more than 40% of the team leaves.
On lease, sale or reorganisation
Instruction No. 12-03 · Decree No. 70, art. 15
When property is sold or leased out, or the company is reorganised.
When theft or damage is found
Instruction No. 12-03 · Decree No. 70, art. 15
As soon as theft, misuse or damage is established.
After a fire or natural disaster
Instruction No. 12-03 · Decree No. 70, art. 15
Immediately after a fire, flood or other emergency.
On liquidation
Instruction No. 12-03
Before the liquidation balance sheet is drawn up.
How often
- What
- Frequency
- Goods in the warehouse
- Once a year
- Food products
- Twice a year
- Finished goods
- Once a year
- Fixed assets
- Once a year; at least once in 3 years
- Cash desk
- Monthly, unannounced
Recommended intervals — Instruction No. 12-03, art. 6
Tax authority inventory
Without notice
The tax authority carries out an inventory without prior notice, by order of an authorised official, without a court decision.
Tax Code, arts. 256, 261
Up to twice a year
For holders of non-excise goods, no more than twice per calendar year; a third time only by order of the Revenue Service head or deputy. The limit does not apply to holders of excise goods.
Tax Code, art. 261(1)
A commission within 2 working days
The director must form an inventory commission within 2 working days of receiving the order. If not, the tax authority forms it.
Tax Code, art. 261(1–2)
Spot checks
The tax authority may count selected items without a commission. You must submit the book balances for those items within 2 working days.
Tax Code, art. 261(3)
What a discrepancy costs
50%
Unrecorded goods
Goods not in the records and without a primary document — a fine of 50% of their market value.
Art. 286(4)
+10%
Shortage
A shortage is treated as a supply at market price, with the taxes that follow. If found by a tax inventory, a further fine of 10% of market value.
Art. 286(9)
₾200
Small amounts
If the market value is ₾1,000 or less — a ₾200 fine; ₾400 for each repeat.
Art. 286(11–12)
No sanction applies if
- the discrepancy is within 2% of recorded goods of the same kind;
- or you reported it yourself — in your returns or to the tax authority — before its inventory or audit began.
Tax Code, art. 286(10). Your own regular inventory is what protects you from the fine.
Budget organisations
Every year, before 31 December
Minister of Finance Order No. 364 (amended by No. 303, 2024)
An inventory of assets and liabilities is mandatory every year, to prepare the financial statements.
A commission of at least 3
Order No. 364
At least three members including the chair. Materially responsible persons and internal auditors cannot sit on it.
May be bought as a service
Order No. 364, art. 5
By the head’s decision, the inventory may be carried out entirely as a procured service, or a qualified specialist may assist the commission.
How it is done
01
Order and commission
The head issues an order and forms a commission. An incomplete commission may not count.
02
Sealing
Auxiliary storerooms are sealed before counting starts.
03
Physical count
Everything is counted, weighed or measured in the presence of the responsible person. Nothing is entered from word of mouth or the books without checking.
04
Count sheets
Sheets are written on site; every correction and sheet is signed by all members.
05
Reconciliation
Physical balances are compared with the books and a discrepancy statement is prepared.
06
Minutes and approval
Shortages within norms are expensed, above norms charged to the responsible person, surpluses taken to income. The head approves the minutes within 2 weeks.
Instruction No. 12-03; for tax inventories — Minister of Finance Order No. 994
Sources (in Georgian)
- Tax Code of Georgia (arts. 256, 261, 286)
- Instruction No. 12-03 on conducting inventories (1995)
- Minister of Finance Order No. 994 (2010)
- Presidential Decree No. 70 (1998), art. 15
- Minister of Finance Order No. 364 (2021), amended by No. 303 (2024)
This page is general information, not legal advice. The law changes — see the official text on matsne.gov.ge. Tax Code edition: 25.06.2026.
An exact count instead of a fine
We carry out the inventory as the law requires and prepare the count sheets, the reconciliation and the minutes.