How profit tax works in Georgia
Georgian companies follow the so-called Estonian model: profit is not taxed while it stays in the company. Tax is due when profit leaves it — mainly when it is paid to the owners as a dividend.
The profit tax is 15% of the payout grossed up: the dividend is divided by 0.85 and 15% of the result is the tax. That means a dividend of 85,000 ₾ uses 100,000 ₾ of profit, of which 15,000 ₾ is profit tax.
When the dividend goes to a person, the company also withholds 5% dividend tax.
Example
A company has 100,000 ₾ of profit and pays all of it out to its owner:
| ₾ | |
|---|---|
| Profit used | 100,000.00 |
| Profit tax (15%) | −15,000.00 |
| Dividend paid | 85,000.00 |
| Dividend tax (5%) | −4,250.00 |
| Owner receives | 80,750.00 |
Altogether 19,250 ₾ — 19.25% of the profit — goes in tax. If the owner needs a specific amount in hand, choose "Owner receives" above and the calculator works backwards.
What else counts as distributed profit
The same 15% (on the amount ÷ 0.85) also applies to some other payments, for example expenses not related to the business, goods or services given away for free, and representation costs above the legal limit.