Dividend Tax in Georgia: The 5% Rate and Paying Yourself

Dividend tax rate in Georgia: 5% at source

A resident company that pays a dividend to an individual, a non-commercial legal entity or a non-resident company withholds 5% of the amount payable, under Article 130 of the Tax Code. If you are a Georgian tax resident, that 5% is final under Article 130(3), so the dividend is not added to your gross income and is not taxed again.

Under Article 130(2) and (8), nothing is withheld from a dividend paid to a company registered under the Law on Entrepreneurs, or from one a bank or microfinance organisation pays out of profit earned in 2023 or later.

Who receives the dividend	Tax withheld at source
An individual, resident or non-resident	5%
A non-resident company	5%
A non-commercial legal entity	5%
A company under the Law on Entrepreneurs, other than an individual enterprise	None
Any shareholder, from a bank’s, credit union’s, microfinance organisation’s or loan provider’s profit earned from 2023	None

Small business status does not change this. Dividends are one of the 12 income types that Government Resolution No 415 keeps out of the 1% regime and out of the GEL 500,000 limit, so an individual entrepreneur with the status has 5% withheld from a dividend like any other individual shareholder.

Profit tax on dividends: 15% on the grossed-up amount

The 5% is one of two taxes on a dividend. A Georgian company pays no profit tax on the profit it keeps. The tax falls on four things listed in Article 97 of the Tax Code, and the first is distributed profit, which Article 98.1 defines as profit paid to a partner as a dividend, in money or in kind.

The rate is 15% under Article 98, charged on the dividend divided by 0.85, as Article 97(10) sets out. A GEL 8,500 dividend is taxed on GEL 10,000, so it costs the company GEL 1,500 in profit tax, about 17.65% of the dividend itself.

Dividend or salary: paying yourself from a Georgian company

Another way to take money out is a salary. Working for your company, including acting as its director, is hired work under Article 12 of the Tax Code. The company withholds income tax at 20% under Article 81 and transfers it when it pays you. A salary for that work is not one of the four profit tax objects, so no profit tax is added on top.

For Georgian citizens and holders of a permanent residence permit, a salary also carries pension contributions of 2% from you and 2% from the company, and the state adds 2% on the first GEL 24,000 of annual salary and 1% on the part from GEL 24,000 to GEL 60,000, under the Law on Funded Pensions. Foreign owners without a permanent residence permit fall outside the scheme. Contributions to the pension account are exempt from income tax under Article 82(1)(b3), so the 20% is worked out on the salary after your 2%.

From the same GEL 10,000, the dividend leaves you GEL 8,075 and the salary GEL 8,000, a gap of GEL 75. The bigger differences are the pension and the payroll work. A salary puts you on the register of hired persons and on the company’s monthly salary return, due by the 15th of the following month under Article 153(5).

Lending yourself company money does not avoid profit tax. Under Article 98.2, a loan from a company to an individual or a non-resident is itself a profit tax object, unless the lender is a bank, credit union, microfinance organisation or loan provider.

Withholding tax rates on interest and royalties

The rates below come from Articles 130 to 132 and 134 of the Tax Code, and the two rows on non-resident royalties and preferential tax countries from the Georgian text of Article 134.

Payment	Paid to	Rate withheld
Dividends	Individual, non-commercial legal entity or non-resident company	5%
Interest	Individual, or non-resident with no permanent establishment in Georgia	5%
Interest from a licensed financial institution, such as a bank deposit	Individual	None
Royalties	Resident individual not registered for VAT	20%
Royalties	Non-resident with no permanent establishment in Georgia	5%
Other Georgian-source payments	Non-resident with no permanent establishment in Georgia	10%
Salary	Non-resident	20%
Interest, royalties and other payments	Person registered in a preferential tax country	15%

Under Article 134(1.1), the 15% preferential country rate does not reach dividends, which stay at 5%. Interest withheld from an individual at 5% is final under Article 131(3), like the dividend tax, and that includes interest your own company pays you on money you lent it. Keep the rate at market level, because Article 98.1 treats a deal with a related party at a non-market price, where the relationship affects the result, as a profit distribution.

Who withholds the tax and when it is paid

The company paying the dividend is the tax agent. Under Article 154 of the Tax Code it transfers the withheld tax to the budget when it pays you, or on the last day of the month for a dividend paid in kind. The profit tax on the distribution goes on the company’s monthly profit tax return, due by the 15th of the following month under Article 153(10). Tax paid late carries interest of 0.05% of the unpaid amount for each overdue day, counting the payment day, under Article 272.

The dividend tax and the profit tax both land in the company’s monthly returns. Among the Tbilisi firms that publish their monthly fees, Tbilisi Expat - LLC Setup, Tax and Business Consulting files monthly declarations to rs.ge before the 15th, with a confirmation sent to the client.