Corporate Income Tax in Georgia Explained (2026 Update)

Corporate income tax in Georgia is 15%, and it is charged when a company distributes profit, not when it earns it. If you assume only a declared dividend counts, your company is taxed on personal expenses, loans to the owner and undocumented payments, with interest and a penalty added. This post covers the corporate tax rate in Georgia, what counts as a distribution, the 5% dividend tax, the declaration and the bookkeeping records the 0% rate requires.

Corporate Income Tax Rate in Georgia

Georgia charges corporate income tax at a flat 15%. Since 1 January 2017 the tax has followed the Estonian model. Under Article 97 of the Tax Code of Georgia, the tax becomes due when the company pays profit out or makes a payment that the Code counts as a payout. No tax is due at the point the profit is earned.

Case	Rate	When it applies
Profit kept in the company	0%	For as long as the profit stays undistributed
Distributed profit	15%	When a dividend is paid or a payment is treated as a distribution
Dividend withholding	5%	When the dividend is paid to an individual or a foreign shareholder
Banks, credit unions, microfinance organisations, other lenders and gambling businesses	20%	On profit, under the older profit-based system

There is no minimum amount of profit before the tax applies. The 15% is due on any distribution, however small.

Tax on Retained Profit vs Distributed Profit

Profit that stays in the company is not taxed. There is no ceiling on the amount, no time limit and no minimum share that has to be reinvested. The profit can be spent on equipment, hiring and working capital or held as cash, and the rate stays at 0% until it is paid out.

The 15% is the company’s own liability, and it arises when the distribution happens. A company that makes ₾200,000 of profit in a year, keeps ₾150,000 and distributes ₾50,000 pays corporate tax on the ₾50,000 only. The tax is ₾7,500 on the distributed part and ₾0 on the ₾150,000 that stays in the company.

Because the tax is charged only when profit is distributed, you decide when it falls due. If your company pays a dividend every year when you do not need the cash, it pays the tax earlier than the law requires.

What Counts as a Profit Distribution

A dividend paid to a shareholder is a distribution. The Tax Code taxes several other transactions at the same 15%, including ones where no money reached a shareholder.

Transaction taxed at 15%	Example
Dividend to a shareholder	Profit paid out in cash or in kind
Expense unrelated to economic activity	A personal cost paid from the company account, or a payment with no document behind it
Free transfer of goods, services or funds	Inventory given away, or an asset a related party uses at no charge
Loan to an individual or a non-resident	Money lent to the company’s owner or to a related party abroad
Interest above the annual ceiling	A loan on which the company pays more than the yearly maximum rate set by the Ministry of Finance, which stands at 24%
Representation expenses above the statutory limit	Client entertainment and gifts beyond the allowed amount
Transaction with an entity in a preferential-tax jurisdiction	A payment to a company registered in a jurisdiction Georgia treats as low-tax

The Revenue Service looks at whether a payment served the business and whether the company received proper value in return. A payment can be taxed as a distribution whatever it is called, and the rule applies even where nobody meant the payment as a payout of profit.

Corporate Tax on Related-Party Transactions

Transactions between related parties are tested against arm’s-length pricing. A loan to a related non-resident at a below-market rate, or a service charged between group companies at an inflated or reduced price, is taxed immediately on the adjustment, whether or not the company distributed anything. The taxpayer has to justify the price if the Revenue Service asks.

Payments That Do Not Count as a Distribution

Ordinary business spending does not trigger the tax, provided each payment is documented and the company received proper value in return:

• salaries paid for real work, which are a deductible expense and carry 20% income tax and no corporate tax
• invoices from suppliers and contractors that are not related parties, paid at market prices
• running costs such as the office, software licences and equipment
• money lent on market terms to a borrower that is not a related party

Two kinds of dividend are also outside the 15%. A dividend paid by a Georgian subsidiary to its Georgian parent company is not taxed at that step, and the tax applies when the profit is paid on to an individual or a non-resident. A dividend that a Georgian company receives from its own foreign subsidiary is not taxed again in Georgia, unless the subsidiary is registered in a jurisdiction Georgia treats as having preferential tax treatment.

Dividend Tax in Georgia: 5% Withholding After Corporate Tax

A dividend carries a second, smaller tax. After the company pays 15% on the distribution, it withholds 5% from the dividend at source under Article 130 of the Tax Code and pays the shareholder the net amount. The 5% is the same for a Georgian individual, a foreign individual and a foreign company.

Three rules apply to the withholding:

• A dividend paid to another Georgian company is exempt from the 5%.
• A dividend paid in kind, such as a transferred asset, is withheld at 5% of the market value of what changed hands.
• A tax treaty can reduce the 5%, in some cases to 0%. Georgia has more than 55 double taxation treaties, and a reduced rate has to be claimed with the Revenue Service before or at the time of payment, generally with proof of tax residency in the treaty country.

Worked Example: Tax on a ₾100,000 Dividend

An LLC has ₾100,000 of profit, and its shareholder, an individual, takes all of it as a dividend.

Step	Calculation	Amount
Profit to be distributed		₾100,000
Corporate income tax	15% of ₾100,000	₾15,000
Dividend paid out	₾100,000 minus ₾15,000	₾85,000
Dividend withholding	5% of ₾85,000	₾4,250
Shareholder receives	₾85,000 minus ₾4,250	₾80,750

The two taxes total ₾19,250, which is 19.25% of the profit. If the ₾100,000 stays in the company, neither tax is due.

Corporate Tax and Dividend Tax on ₾20,000 to ₾250,000 of Profit

Both rates are flat, so the calculation is the same at every amount.

Profit distributed	Corporate tax (15%)	Dividend withholding (5%)	Shareholder receives
₾20,000	₾3,000	₾850	₾16,150
₾50,000	₾7,500	₾2,125	₾40,375
₾100,000	₾15,000	₾4,250	₾80,750
₾250,000	₾37,500	₾10,625	₾201,875

Which Companies Pay 20% Corporate Tax

The distribution model does not cover every sector. Commercial banks, credit unions, microfinance organisations, other lenders and gambling businesses are taxed under the older profit-based system, at 20% since 1 January 2023.

These companies file an annual corporate tax return before 1 April of the following year. They pay advance tax in four equal instalments, on 15 May, 15 July, 15 September and 15 December, and settle any balance with the annual return.

Corporate Tax Under Virtual Zone, International Company and Small Business Status

Three special statuses carry different rates from the standard 15%.

Regime	Tax on profit	Tax on dividends	Who can hold it
Ordinary LLC	15% on distributed profit, 0% on retained profit	5%	Any company outside the 20% sectors
Virtual Zone status	0% on qualifying exported IT income	5%	Companies with qualifying IT export income
International Company Status	5%	0%	Companies with real substance in Georgia that can show two years or more of documented experience in a permitted activity, either their own, that of a majority owner, or that of a foreign enterprise they represent
Small Business Status	1% of turnover up to ₾500,000 a year, with no deduction for costs	Not applicable	Individual entrepreneurs only

A Virtual Zone company still withholds 5% when it pays a dividend, because the status exempts the export profit from corporate tax and leaves the dividend rules unchanged. International Company Status also sets a 5% tax on staff salaries, and its two-year experience requirement rules out a new company unless a majority owner, or a foreign enterprise it represents, has that experience.

An LLC cannot hold Small Business Status. The 1% turnover tax is charged on revenue, not profit, and only an individual entrepreneur can apply for it.

Corporate Income Tax Declaration: Deadline and Filing Rules

Corporate tax is part of the monthly declaration every LLC files with the Revenue Service, due by the 15th of the month after the one being reported. It is filed through rs.ge, the Revenue Service portal, which is in Georgian throughout.

Three filing rules apply to an ordinary LLC:

• A month with no distribution still needs a declaration, and that zero declaration shows nothing owed.
• A month in which a dividend is paid adds the dividend withholding declaration, due on the same date.
• There is no annual profit return. The monthly declaration is the company’s only corporate tax filing.

To pay a dividend, the shareholders resolve to distribute profit. The company calculates 15% corporate tax on the distribution and withholds 5% from the dividend, and the shareholder receives the net amount. For a dividend paid in March, the corporate tax and the withholding are declared on rs.ge and paid by 15 April, in lari, from a Georgian bank account.

Filing and paying are separate actions. Submitting the declaration does not pay the tax. The payment goes to the Revenue Service under treasury code 101001000, which works only through a Georgian bank.

VAT, payroll and pension declarations share the same monthly deadline when they apply to the company. Penalties for late filing and underpayment are applied automatically. An unpaid amount attracts interest for every day it stays outstanding after the deadline. A declaration that shows less tax than was due is penalised separately, in addition to the tax still owed.

Annual financial reporting is a separate obligation from corporate tax. Companies file annual financial statements with SARAS by 1 October of the year after the reporting period, under the Law on Accounting, Reporting and Auditing and not the Tax Code.

Bookkeeping Requirements for the 0% Rate on Retained Profit

The 0% rate applies only while no payment out of the company counts as a distribution. If the Revenue Service reviews the company, the accounts have to show that, and having declared no dividend does not show it.

The accounts need four things:

• A tax source document behind every expense, showing its business purpose. Under Article 72 of the Tax Code the document identifies both parties, carries a date, describes what was supplied, states its value and exists in at least two identical copies.
• Commercial terms for every payment to a shareholder, a director or a related party. A loan to the owner is put on real terms from the start, because an interest-free loan can be treated as a free transfer of value.
• Pricing support for each related-party transaction, prepared when the transaction takes place and not after the Revenue Service asks for it.
• Representation expenses tracked against the statutory limit month by month, because the amount above the limit is taxed as a distribution.

A source document has to be kept for a minimum of three years, counted from the close of the calendar year it relates to. An LLC keeps full accounts from the day it is incorporated, whatever its turnover.

We keep these records and file the declarations as part of LLC accounting, from ₾180 a month excluding VAT for a simple LLC that is not registered for VAT.

Common Corporate Income Tax Mistakes

Six mistakes are common among owners of a Georgian LLC:

1. Paying personal expenses from the company account or card.
2. Taking a loan from the company with no real intention of repaying it.
3. Skipping the monthly declaration in a month with no distribution.
4. Budgeting 15% for a dividend and leaving out the 5% withholding.
5. Assuming a tax treaty lowers the 5% without a claim filed before or at the time of payment.
6. Assuming Virtual Zone status removes dividend withholding.

Mistakes 1 and 2 are most common among owners who operated as an individual entrepreneur first. An individual entrepreneur and the business are the same person in law, so taking money out of the business account is not a taxable event. An LLC is a separate legal person, its money belongs to the company until it is distributed, and the same payments are taxed as a distribution at 15%.

Tax on a Georgian Company’s Profit in Your Country of Residence

Paying Georgian corporate tax and dividend tax covers the tax due in Georgia only. If you remain tax resident in another country, you may still be taxed there. Many countries also apply controlled foreign company rules, which attribute the income of a foreign company to a resident shareholder whether or not the profit is distributed.