Summary
The figures
0%
Tax Code of Georgia, Art. 97·1 Oct 2026
15%
Tax Code of Georgia, Art. 97–98·1 Oct 2026
5%
Tax Code of Georgia, Art. 130·1 Oct 2026
As written
1 provision
For a resident enterprise the object of taxation is distributed profit; expenses or other payments not related to economic activity; free-of-charge supplies of goods, services or money; and representation expenses above the statutory limit. (Paraphrased; the article text on matsne.gov.ge governs.)Tax Code of Georgia, Article 97 (object of profit taxation)
How it works
The regime, often called the Estonian model, applies to Georgian resident companies and to permanent establishments of foreign companies. Banks, insurers, microfinance organisations and a few other regulated entities moved to it later and on their own schedule, so check the date if you are in financial services.
Tax is triggered by a distribution or by a deemed distribution. Deemed distributions include expenses with no business purpose, gifts and free supplies, representation costs above the limit, and certain payments to related parties and to persons in low-tax jurisdictions. Loans to shareholders can be treated as distributions; ask before lending retained profit to an owner.
The return is monthly and is filed only for months with a taxable event, by the 15th of the following month. A company that reinvests everything files nothing and pays nothing on profit, year after year.
How it combines with the special regimes
International Company status replaces the 15% with 5%. Virtual Zone status exempts the profit from exported IT services entirely. A free industrial zone company pays no profit tax at all on zone activity. Each of those regimes has its own page.
Worked example
A company earns $1,000,000 in 2026 and pays $300,000 out as dividends. Corporate income tax: $300,000 × 15/85 = $52,941. Dividend withholding: 5% of $300,000 = $15,000, less under a treaty. Total tax on the distribution: $67,941, or 22.6% of the cash paid out. The $700,000 kept in the business carries no tax until the day it is distributed.
FAQ
Questions investors ask about this rule
Does this apply to a branch of a foreign company?
Yes. A permanent establishment in Georgia is taxed on the same basis: profit attributed to it is taxed when it is distributed or deemed distributed to the head office.
What counts as a distribution?
Dividends in cash or in kind, and anything the Tax Code treats as equivalent: non-business expenses, free supplies, over-limit representation costs and certain related-party payments. The article is short; read it before paying anything to an owner.
Can a company lend its retained profit to a shareholder?
It can, but some loans to shareholders and related parties are treated as distributions and taxed. Structure the loan with your accountant before it is paid.
Is the 15% reduced by a tax treaty?
No. Treaties reduce the 5% dividend withholding, not the 15% corporate tax, which is a tax on the company rather than on the recipient.
Sources
Sources
- Tax Code of Georgia (matsne.gov.ge), current text
- Revenue Service of Georgia, guidance