Georgian companies get sold on one number: 15%. The number is real and the framing is wrong. Corporate tax in Georgia is not charged on profit you earn, it is charged on profit you take out, and the base is grossed up before the rate touches it. Then a second tax lands on the dividend. Here is the full arithmetic, and the transactions that trigger it before you meant to.
What Georgia actually taxes
Georgia moved to a distribution-based corporate tax on 1 January 2017. Retained profit is not taxed. Tax attaches at the moment value leaves the company.
The object of taxation sits in Article 97 of the Tax Code of Georgia, published in consolidated form on the Legislative Herald of Georgia. The consolidated text carries amendments through late June 2026, so check the version date on the page before you rely on any single article.
Article 97 catches four things: profit distributed to an owner, costs and payments not connected to economic activity, supplies made free of charge, and representation expenses above a statutory ceiling. Only the first of those looks like a dividend. The other three are where owners get surprised.
Think of a Georgian LLC as a deferral box. Money that stays inside and gets reinvested is untaxed. Money that leaves in a way the Code recognises is taxed on the spot.
The 15% that is not 15%
The rate is 15%. It is not applied to the amount you transfer.
The taxable base is grossed up first: the outflow is divided by 0.85, and 15% is charged on the result. Pay out 85,000 GEL and the base is 100,000 GEL, so the tax is 15,000 GEL. Measured against the cash that actually left, that is 17.65%.
Budgeting 15% of the transfer leaves you short by roughly 2.65 percentage points. Every distribution costs 17.65% of the net amount you move, before the dividend layer is added.
What counts as a distribution
The word "distribution" is doing more work than most founders expect. This is the practical map.
| Transaction | Taxed when | What to watch |
|---|---|---|
| Dividend paid to an owner | On payment | The obvious case, and the smallest part of the risk |
| Personal spending on the company card | On the expense | Treated as a cost outside economic activity |
| Undocumented expense | On the expense | No primary document means no business cost |
| Free supply of goods, services or cash | On the transfer | Includes write-offs and gifts to related parties |
| Representation and entertainment above the cap | At year end | Ceiling is 1% of the previous year's revenue or expenses, whichever is larger |
| Above-ceiling interest on a shareholder loan | On payment | The Minister of Finance sets the ceiling annual rate |
| Loans, advances or penalties paid to a preferential tax jurisdiction | On payment | Caught as a deemed distribution regardless of intent |
| Dividend from one Georgian company to another | Not taxed | Passes without a second corporate charge |
The interest ceiling has sat at 24% a year for a long stretch, but it lives in a ministerial order rather than the Code, so confirm the rate in force before you price an owner loan. The Revenue Service publishes the current instruments in its legislation directory.
Groceries, flights and rent paid from the company account are not a grey area. They are non-business costs under Article 97, taxed at 15% on the grossed-up amount in the month they occur, with interest and penalty if you file late. A year of casual card use is a corporate tax bill you never decided to incur.
The dividend layer
Corporate tax is charged on the company. The dividend tax is charged on the shareholder, and it comes afterwards.
Dividends paid by a Georgian company to a natural person or to a non-resident are taxed at source at 5%. The company withholds it and remits it, so the shareholder does nothing. For an individual, that 5% is the end of the matter in Georgia: the income is not pulled back into a personal return. The wider rate picture for individuals sits in our guide to personal income tax for expats.
Dividends moving between two Georgian resident companies are outside this. No withholding, and the receiving company does not take the amount into gross income. That single rule is why holding structures inside Georgia are common.
What 100 GEL of profit actually becomes
Run the two layers in order, on a company distributing everything it earns.
| Step | Amount in GEL | Basis |
|---|---|---|
| Profit available, retained | 100.00 | Untaxed while it stays inside |
| Corporate tax on full distribution | 15.00 | 15% of the grossed-up base |
| Distributable after corporate tax | 85.00 | What can legally move |
| Dividend tax withheld at source | 4.25 | 5% of 85.00 |
| Reaching the shareholder | 80.75 | Net in hand |
| Total Georgian tax | 19.25 | 19.25% effective |
Roughly 19.25% is the honest headline number for a standard Georgian LLC that distributes fully. It is still low. It is not 15%, and it is not the 5% that gets quoted in nomad forums.
Who pays something other than 15%
Special statuses change one or both layers. They also carry conditions that are tested, not assumed.
| Regime | Tax on distribution | Dividend tax | Who it fits |
|---|---|---|---|
| Standard LLC | 15% | 5% | Every company by default |
| Virtual Zone Person | 0% on qualifying IT income supplied abroad | 5% | Software firms with genuine activity performed in Georgia |
| International Company Status | 5% | 0% | IT and maritime firms meeting substance and track-record tests |
| Banks, credit unions, microfinance and loan issuers | 20% | 5% | Regulated lenders, on the higher rate since 2023 |
| Individual Entrepreneur with Small Business Status | Not applicable | Not applicable | Sole traders taxed at 1% of turnover instead |
Two things fall out of that table. A Virtual Zone company is not a 0% structure once the money reaches you personally, because the 5% dividend layer survives; our breakdown of Virtual Zone company status covers what the status does and does not exempt. And the 1% regime is not a company regime at all, it attaches to a registered sole trader, which is the real substance of the LLC versus Individual Entrepreneur decision.
If your work is solo consulting billed abroad, running the numbers against 1% small business status before you incorporate usually beats restructuring a year in.
Filing and paying
Corporate tax here is a monthly job, not an annual one. A taxable transaction in March is declared and paid in April, by the 15th.
Returns go through the Revenue Service portal. The agency's e-services directory covers taxpayer registration, declarations and the public taxpayer registers. Months with no taxable transaction still sit inside your filing rhythm, so agree with your accountant exactly which returns are due and which are not.
This is the part where cheap bookkeeping gets expensive. Deemed distributions are found in the ledger, not in the bank statement, and reconstructing nine months of receipts in a hurry is how documented costs become undocumented ones. Working with English-speaking accountants in Tbilisi from month one is the cheaper option. Companies that have crossed the statutory audit thresholds will also find that audit firms in Tbilisi test these exact accounts first.
We research the tax advisors working in Tbilisi and rank the ones worth paying. Independently researched, re-checked quarterly, free to read.
See the ranked list
What your home country does with the 15%
Georgia has 58 treaties on the avoidance of double taxation in force, listed by the Ministry of Finance of Georgia with the agreed dividend rates alongside each country. Estonia, Malta and Cyprus show 0% on dividends. Others show tiered rates depending on the size of the holding.
Two points get missed. A treaty caps withholding at source, so it can reduce the 5% dividend layer. It does not touch the 15%, because that is a tax on the company rather than a withholding on you. And where a treaty rate is higher than 5%, the domestic 5% still applies, since a treaty limits a country's taxing right rather than expanding it.
The credit side is where real money moves. Many home-country systems credit foreign withholding tax on the dividend but not the underlying corporate tax, so the 15% can end up as a genuine cost even when the 5% is fully recovered. Whether that applies to you depends on your own residence rules, and it is worth a written opinion rather than a guess. Our guide to Georgia's double taxation treaties sets out how the mechanics work in practice.
Where owners get caught
Treating the company account as a personal account
The deferral only holds while the money is genuinely in the business. Paying personal costs from the company converts a tax-free reserve into a taxable outflow, at the worst possible rate, in the worst possible month.
Reading a 0% status as a 0% outcome
Virtual Zone and International Company Status change the corporate layer. They do not automatically remove the shareholder layer, and both carry substance conditions that can be withdrawn if the activity is not really performed here.
Declaring a dividend the accounts do not support
A distribution has to come from distributable profit. Paying one out of cash that is actually working capital creates a corporate tax charge on money you then need back, which is a problem you solve twice.
Any of these is a short conversation with tax advisors in Tbilisi before the fact and an expensive correction after it.
Key takeaways
- Georgia taxes corporate profit on distribution, not on accrual. Retained and reinvested profit stays untaxed.
- The rate is 15%, applied to a grossed-up base, which is 17.65% of the amount that actually leaves the company.
- Dividends to individuals and non-residents are then taxed at source at 5%, withheld by the company.
- Full distribution of 100 GEL of profit leaves roughly 80.75 GEL in hand, an effective Georgian tax of about 19.25%.
- Non-business costs, undocumented expenses, free supplies and over-cap representation spending are all taxed as distributions.
- Dividends between two Georgian companies pass without a second charge.
- Corporate tax is filed and paid monthly, by the 15th of the following month.
- Special statuses change one layer, rarely both, and every one of them has conditions.
FAQ
What is the corporate tax rate in Georgia?
15% on distributed profit. Georgia has taxed distributions rather than earnings since 1 January 2017, so profit left inside the company is not taxed at all. Regulated financial institutions are the main exception and pay 20%. Special statuses can reduce the rate to 5% or zero on qualifying income.
Do I pay corporate tax if I take nothing out of the company?
No. Retained profit carries no corporate tax charge in Georgia, which is the entire point of the distribution model. You still file returns and keep books, and you can still trigger tax through deemed distributions such as non-business expenses. Genuine reinvestment stays untaxed indefinitely.
How much is dividend tax in Georgia?
5%, withheld at source by the paying company, on dividends to natural persons and non-residents. The shareholder receives the net amount and has nothing further to declare in Georgia on that income. Dividends between two Georgian resident companies are not subject to this withholding.
What is the total tax on profit taken out of a Georgian company?
About 19.25% on a standard LLC distributing in full. That is 15 GEL of corporate tax on 100 GEL of profit, then 5% withheld on the 85 GEL left, leaving 80.75 GEL. The two layers are sequential, not combined, so the order matters when you model it.
Why is the effective rate 17.65% rather than 15%?
Because the taxable base is grossed up before the rate applies. The outflow is divided by 0.85 and the 15% is charged on that larger figure. A payment of 85,000 GEL therefore produces a 15,000 GEL charge. Treat 17.65% as the real cost of moving money out.
Are dividends between two Georgian companies taxed?
No. There is no withholding on the payment, and the receiving Georgian company does not include the amount in gross income. Tax is charged when the profit eventually leaves the group to an individual or a non-resident. This is the mechanism behind most local holding arrangements.
Does a Virtual Zone company pay dividend tax?
Yes. Virtual Zone status exempts qualifying IT income from the corporate layer, but the 5% dividend tax on distributions to individuals and non-residents still applies. The status also depends on the work genuinely being performed in Georgia. A treaty may reduce the 5% depending on where the shareholder is resident.
When is the corporate tax return due in Georgia?
By the 15th of the month following the month in which the taxable transaction occurred. Filing is electronic through the Revenue Service portal. This is a monthly cycle rather than an annual one, which catches founders used to year-end corporate filing elsewhere. Late filing attracts interest and penalty.
Can spending company money on personal things trigger corporate tax?
Yes, and this is the most common unplanned charge we see. Costs not related to economic activity are a taxable object under Article 97, taxed at 15% on the grossed-up amount in the month they arise. Undocumented expenses fall into the same category. Keep a clean separation between the company account and your own.
Can a double tax treaty reduce the 5% dividend tax?
Often, yes. Georgia has 58 treaties in force and several set the dividend rate at 0% or at a reduced tier based on the size of the shareholding. Claiming a treaty rate normally requires a residency certificate from the other country. The treaty does not reduce the 15% corporate layer, which is levied on the company.
Do banks pay the same corporate tax as other Georgian companies?
No. Commercial banks, credit unions, microfinance organisations and loan issuers sit on a 20% rate rather than 15%, applied since 2023. The distinction only matters if you are operating a regulated lender. Ordinary trading, consulting and software companies remain on the standard treatment.