Corporate (Profit) Tax in Georgia: The Estonian Model (2026)

Georgia does not tax company profit in the way most countries do. Since 1 January 2017, most companies have been taxed under a distribution-based system — widely called the “Estonian” model — in which retained and reinvested profit is not taxed, and profit tax falls due only when profit is distributed or treated as a deemed distribution. The standard rate is 15%.

The model: tax on distribution, not on earning

Under the classic corporate income tax that Georgia used before 2017, a company calculated its taxable profit each year (gross income minus deductible expenses) and paid tax on that figure whether or not the money left the company. The distribution model replaced that logic for most companies from 1 January 2017.

The change is not an exemption — it is a deferral. Profit is not taxed while it stays in the company; it is taxed when it is taken out. A company that earns profit and reinvests it in its own operations pays no profit tax on that profit until the day it distributes it. Because taxable profit no longer has to be computed annually from gross income and deductions, the tax attaches instead to a short list of specific events.

The rate

Taxpayer	Profit tax rate
Most companies (standard)	15%
Commercial banks, credit unions, microfinance organisations, loan providers	20%

The rate is applied to the grossed-up value of the taxable amount, not to the net cash paid out — so the effective burden on a distribution is higher than 15% of the cash sum. The exact grossing-up formula should be checked against the Tax Code or with an adviser. Rates and the categories of taxpayer they apply to can change, so confirm the current rate with the Revenue Service before relying on it.

The tax base: four taxable events

Instead of taxing annual profit, the model taxes the grossed-up value of four categories of transaction:

Taxable event	What it covers
Distributed profit	Distribution of profit to a partner as a dividend, in monetary or non-monetary form.
Costs not related to economic activity	Expenses that do not serve the business — for example undocumented expenses, spending not aimed at generating income, and interest paid above the ceiling set by the Minister of Finance.
Free-of-charge supplies	Free-of-charge delivery of goods, services or funds; shortages of inventory or fixed assets are also treated as free supply when identified.
Over-limit representation costs	Representation (entertainment) expenses exceeding the statutory limit set by the Tax Code.

The purpose of the last three categories is to stop profit being taken out of the company in disguised forms — as fake expenses, gifts or perks — without ever being taxed as a distribution. Certain transactions with persons in preferential (low-tax) jurisdictions, such as loans or advances to them, are also brought into immediate taxation, and the Tax Code allows previously paid profit tax to be credited back in defined cases (for example when an advance or loan is returned).

Dividends distributed between Georgian resident companies, and dividends received from most foreign enterprises, are generally outside the profit tax base — an important point for holding structures, but one with exceptions for preferential-regime jurisdictions.

Who is outside the standard model

The standard 15% distribution model covers most companies. Some financial-sector entities — commercial banks, credit unions, microfinance organisations and loan providers — are taxed at the higher 20% rate. Whether a particular financial institution or insurer is subject to the distribution model, a different regime, or a special transition rule can depend on the entity type and the year, so confirm the treatment of a specific company with the Revenue Service rather than assuming the standard rules apply.

Filing and payment

The profit tax reporting period is the calendar month. A company submits a monthly profit tax return and pays the tax, generally by the 15th day of the month following the month in which a taxable event occurred. In months with no distribution or other taxable event, there is typically nothing to pay. Returns are filed electronically through the Revenue Service portal at rs.ge. Deadlines and the exact filing obligations depend on the company’s circumstances, so confirm them with the Revenue Service or an adviser.

How this fits with the rest of the system

The distribution model is the default for ordinary Georgian companies. Alongside it, Georgia offers special statuses and regimes that change the profit-tax outcome for qualifying businesses:

• Special tax regimes — the small, micro and fixed-status regimes aimed at individual entrepreneurs and very small businesses.
• Business statuses — including International Company and Virtual Zone status, which can substantially reduce the effective profit-tax rate for qualifying IT and service companies.
• Running a company in Georgia — the practical duties of operating a Georgian company, including tax registration and reporting.

Profit tax sits separately from personal income tax (which taxes individuals) and from VAT (a transaction tax that can apply regardless of profit-tax position).

This guide is general information, not tax advice. The taxable-event rules, the treatment of preferential-jurisdiction transactions and the position of financial institutions are detailed and fact-specific, and the figures can change, so take professional advice and confirm the current rules with the Revenue Service before relying on a particular treatment.

Frequently asked questions

How does Georgia's 'Estonian' corporate tax work?

Under the distribution-based model in force for most companies since 1 January 2017, corporate profit is not taxed while it is retained or reinvested. Tax becomes due only when the profit is distributed — for example paid out as a dividend — or when it is treated as a deemed distribution. Companies that keep their earnings in the business and reinvest them can therefore defer profit tax indefinitely, which is the defining feature of the model.

What is the corporate profit tax rate in Georgia?

The standard profit tax rate is 15%, applied to the grossed-up value of the taxable amount. A higher 20% rate applies to commercial banks, credit unions, microfinance organisations and loan providers. Because rates and the entities they apply to can change, confirm the current rate with the Revenue Service before relying on it.

What events trigger profit tax?

Four categories: (1) distributed profit, chiefly dividends paid to partners in money or in kind; (2) costs not related to economic activity, such as undocumented expenses; (3) free-of-charge supplies of goods, services or funds; and (4) representation (entertainment) expenses above the statutory limit. The tax is charged when one of these events occurs, not on annual accounting profit.

Is reinvested profit taxed?

No. Profit that a company retains and reinvests is outside the tax base until it is distributed or deemed distributed. This is the central point of the model: taxation is deferred to the moment of distribution rather than levied on profit as it is earned.

Are dividends between Georgian companies taxed?

Distribution of dividends between Georgian resident companies is generally not subject to profit tax at the level of the distributing company, and dividends received from most foreign enterprises are also outside the base — but transactions involving persons in low-tax (preferential) jurisdictions are treated differently. Check your specific structure against the Tax Code and take advice.

How often do companies file profit tax returns?

The profit tax reporting period is the calendar month. A company files a monthly profit tax return and pays the tax, generally by the 15th day of the following month, for months in which a taxable event (such as a dividend distribution) occurs. Returns are filed electronically through the Revenue Service portal at rs.ge.