Corporate income tax is one line in the wider tax system in Georgia, and it is not what most guides describe. The rate is 15%, but it does not apply to profit as your company earns it - it applies only once that profit actually leaves the company, whether as a dividend or as one of several transactions the Tax Code treats the same way. Get the timing right and a Georgian LLC can run for years without owing a lari of corporate tax. Get it wrong, and a transaction you never thought of as a distribution triggers the 15% anyway. Here is exactly what the rate covers, what counts as a distribution, and what does not.
What Georgia actually taxes: profit that leaves, not profit that is earned
Since 2017, Georgia has run its corporate income tax on the Estonian model rather than the traditional annual-profit basis most countries use. Instead of calculating taxable income once a year through revenue minus deductions, Georgia taxes a defined set of transactions as they happen, at a flat 15%, whenever any of them occurs. Profit that is not distributed is not a taxable event at all - not deferred, not accrued, simply untaxed for as long as it stays inside the company.
This is a genuinely different structure from taxing profit as it is earned and letting a company later claim deductions or carry losses forward. There is no annual profit calculation for an ordinary Georgian LLC to file at all, because the tax does not care what your accounts said your profit was in a given year. It cares whether a distribution happened, a rule set out in the corporate profit tax chapter of the Tax Code of Georgia. We go through what reinvesting under this model actually looks like in practice, including the accounting consequences of choosing to leave profit in the business, in our reinvested profit model guide.
The 15% rate, and what actually counts as a "distribution"
This is the part almost every English-language summary gets thin on, and it is the part that costs people money when they assume "distribution" means only a formally declared dividend.
A dividend paid to a shareholder, in cash or in kind, is the obvious case. But the Tax Code treats several other transactions as economically equivalent to a distribution, and taxes them at the same 15% the moment they occur:
| Triggers the 15% | What it actually looks like |
|---|---|
| Dividend to a shareholder | Cash or non-monetary distribution of profit |
| Costs unrelated to economic activity | An expense with no genuine business purpose, or one that is undocumented |
| Free transfer of goods, services or funds | The company gives away inventory, or lets a related party use an asset, at no charge |
| Interest above the annual threshold | Interest paid on a loan at a rate above the ceiling the Ministry of Finance sets each year, currently 24% |
| Loans to natural persons or non-residents | The company lends money to its own owner or to a foreign related party |
| Representation expenses over the limit | Client entertainment and gifts once they exceed 1% of the year's revenue and expenses combined |
| Transactions with a preferential-tax-jurisdiction entity | Payments routed through a company registered somewhere Georgia treats as a low-tax jurisdiction |
The categories above exist precisely to close the gap between "we never declared a dividend" and "the company's money ended up benefiting the owner anyway." Covering a personal expense from the business account, lending yourself money with no real intention of repaying it, or overpaying a related party for something with no commercial logic are not ways around the 15% - they generally are the 15%, assessed the moment the Revenue Service identifies them rather than the moment you decided not to call it a dividend.
None of this changes if the company genuinely has no shareholders drawing money out. A business with clean books, real expenses and no related-party transactions simply never triggers any of these categories, and pays nothing until it actually distributes.
What does not trigger the 15%
Three things sit outside the tax entirely, and confusing any of them with a taxable distribution costs a business real money in the wrong direction.
Profit that stays in the company. Reinvested earnings, whatever the amount, are not taxed at all while they remain undistributed. There is no ceiling, no time limit and no minimum reinvestment ratio - the deferral is indefinite by design.
Dividends passed between two Georgian companies. If one Georgian company owns another and the subsidiary distributes profit up to its parent, that distribution is not taxed a second time at 15%. The tax already applied once, at whichever level actually paid it out to an individual or a non-resident.
A dividend a Georgian company receives from its own foreign subsidiary, provided that subsidiary is not itself registered in a jurisdiction Georgia treats as having preferential tax treatment. Profit that has already been taxed abroad and flows up to a Georgian parent is not taxed again on arrival.
Salary sits in a related but separate category: it is a deductible business expense recognised before any distribution question arises, taxed once at the individual level under ordinary personal income tax rather than under corporate tax at all. We cover the full choice between salary and dividends, including the actual take-home numbers on each, in paying yourself from a Georgian company.
A worked example: what 100,000 GEL actually costs to distribute
Say an LLC has 100,000 GEL of profit sitting in the business and the shareholders decide to take it out as a dividend rather than reinvest it.
| Step | Amount |
|---|---|
| Profit available for distribution | 100,000 GEL |
| Corporate income tax at 15% | 15,000 GEL |
| Amount actually paid out as the dividend | 85,000 GEL |
The 15,000 GEL is the company's own liability, declared and paid before the money reaches the shareholder. What happens to the remaining 85,000 GEL once it is paid out - specifically the further 5% dividend withholding applied at that point - is a separate tax event on the recipient, which we cover in full, including the exact take-home figure, in dividend tax in Georgia. Leave the same 100,000 GEL in the company instead, and none of this triggers at all.
Banks, credit unions and lenders pay 20%, not 15%
The Estonian model does not apply uniformly across the whole economy. Commercial banks, credit unions, microfinance organisations and other lending entities, along with gambling and gaming businesses, sit under a separate regime. Since 1 January 2023, this group pays a flat 20% corporate income tax rather than 15%, reflecting an older, profit-based approach rather than the distribution-triggered one everyone else uses.
If your business is a genuine lending or gambling operation, budget for 20% rather than 15% and expect a different filing rhythm than the rest of this guide describes. Almost no reader outside those specific sectors needs to think about this exception again.
How this compares to Small Business Status and ordinary personal tax
An LLC is one of three ways Georgia taxes business activity, and the 15%-on-distribution structure is what makes it the right choice at a different point than the other two.
Small Business Status charges 1% of gross turnover, with no deduction for costs, up to a 500,000 GEL ceiling - a completely different mechanic that taxes revenue rather than profit, and only an Individual Entrepreneur can hold it. Ordinary personal income tax, the default outside any special status, charges 20% on profit with expenses deductible, for both individuals and IE income. Neither of those two options ever reaches 0%, which is the specific advantage an LLC has once a business is genuinely reinvesting rather than drawing cash out every month.
The break-even point is less about the headline rate and more about what you plan to do with the money: a solo operator spending everything they earn each month usually does better on the 1%, while a business retaining profit to grow captures real value from the 15%-on-distribution model that neither alternative offers. We work through the full decision, including where Virtual Zone and International Company status fit alongside plain LLC taxation, in Georgia's tax regime comparison, and the turnover-based alternative in full in 1% tax in Georgia.
Filing: the monthly declaration, whether or not anything was distributed
Every Georgian LLC files a corporate tax declaration with the Revenue Service every month, by the 15th, exactly like every other registered business. In a month with no distribution and none of the triggering transactions above, the filing is still due - it simply shows nothing owed.
This is easy to underestimate precisely because the tax so often comes to zero. A company that has never distributed profit can go years filing declarations that show no corporate tax liability, and it is tempting to treat the filing itself as optional once the pattern feels routine. It is not: the obligation to file is separate from the amount owed, in exactly the same way it is for monthly income tax declarations. Every date that applies to an LLC across the year, including where this fits alongside VAT and annual financial reporting, is collected in one place in Georgia's tax deadlines.
Getting the timing right
Because the tax event is distribution rather than earning, the planning question for a growing company is genuinely different from the one a Western founder is used to. Instead of asking "how do I reduce taxable profit," the question becomes "how long can we defer taking money out, and does the business actually need to."
A company reinvesting in equipment, hiring or working capital defers the entire 15% indefinitely simply by not distributing. A company that distributes annually as a matter of habit, rather than because the owners specifically need the cash that year, is paying tax earlier than the law requires it to. Registry fees do not change with any of this planning - an LLC costs 200 GEL standard or 400 GEL for same-day processing through LLC registration, regardless of how the company plans to handle distributions later.
We track what has actually been distributed versus reinvested, flag any transaction that risks being read as a deemed distribution, and file the monthly declaration either way.
See what it costs
Key takeaways
- Georgia's corporate income tax is 15%, charged only when profit is distributed, not as it is earned.
- "Distribution" includes non-business expenses, free transfers of value, excess interest, loans to owners or non-residents, and representation costs above 1% of revenue, not only formal dividends.
- Retained profit sits at 0% indefinitely. Dividends between Georgian companies, and dividends from an already-taxed foreign subsidiary, are not taxed again.
- Banks, credit unions, microfinance organisations and lenders pay 20% rather than 15%, since 2023.
- The monthly declaration is due whether or not anything was actually distributed that month.
- On 100,000 GEL distributed, the company's own CIT liability is 15,000 GEL, before any further withholding on the payout itself.
Frequently asked questions
What is the corporate income tax rate in Georgia?
15%, charged only when profit is distributed rather than as it is earned. Profit kept inside the company is taxed at 0% for as long as it stays there, under the Estonian-style model Georgia adopted in 2017.
Do I pay corporate tax on profit I have not taken out of the company yet?
No. Retained, reinvested profit is not a taxable event at all under Georgia's system. The 15% only applies once profit is actually distributed, or once a transaction the Tax Code treats as equivalent to a distribution occurs.
What counts as a distribution besides a formal dividend?
Non-business or undocumented expenses, free transfers of goods, services or funds, interest paid above the Ministry of Finance's annual threshold, loans to the owner or to non-residents, representation expenses above 1% of revenue, and transactions with entities in preferential-tax jurisdictions. All of these are taxed at the same 15% as a declared dividend.
Can I avoid the 15% by just spending company money on myself?
No. Covering personal expenses from the business account or taking an informal loan with no real intention of repaying it is one of the categories the Tax Code specifically treats as a distribution. It is generally the more expensive route, not a way around the tax.
Do I pay corporate tax again if my LLC receives a dividend from another Georgian company?
No. Dividends passed between two Georgian companies are not taxed a second time at the receiving company's level. The 15% has already applied once, further up the chain.
What happens if my Georgian company receives a dividend from its own foreign subsidiary?
It is generally not taxed again in Georgia, provided the foreign subsidiary is not registered in a jurisdiction Georgia treats as a preferential-tax regime. Profit already taxed abroad is not automatically re-taxed on arrival at the Georgian parent.
Why do banks and lenders pay 20% instead of 15%?
Georgia carved commercial banks, credit unions, microfinance organisations and other lenders, along with gambling businesses, out of the standard Estonian-model system. Since 1 January 2023 this group pays a flat 20% rather than 15%, reflecting an older profit-based approach specific to that sector.
Do I have to file a corporate tax declaration in a month with no distribution?
Yes. Every Georgian LLC files monthly with the Revenue Service by the 15th, regardless of whether anything was actually distributed that month. A month with nothing owed still requires a filing showing that.
Is it better to register an LLC or get Small Business Status?
It depends on what you plan to do with the profit. Small Business Status charges 1% of gross turnover with no deductions, which usually suits a solo business spending most of what it earns. An LLC's 15%-on-distribution model rewards a business that reinvests, since reinvested profit is taxed at 0% for as long as it stays in the company.
Is there a minimum amount of profit before corporate tax applies?
No. There is no threshold - the 15% applies to any distribution, however small, once one of the triggering transactions occurs. What determines whether tax is owed is whether a distribution happened, not how much profit the company holds overall.
How is the 15% different from the 5% dividend tax?
They are two separate charges on the same event. The company itself pays 15% corporate income tax on the amount it distributes. The remaining payout is then subject to a further 5% withholding tax when it reaches the shareholder, covered in full in our dedicated guide to dividend tax in Georgia.