Estonian Corporate Tax Model – Georgia
Since 2017 Georgia applies Estonian corporate tax model: undistributed company profits taxed at 0%, tax of 15% charged only upon dividend distribution. This stimulates reinvestment and business growth. One of most competitive systems in region.
Estonian Corporate Tax Model
Since 2017 Georgia applies Estonian corporate tax model: undistributed company profits taxed at 0%, tax of 15% charged only upon dividend distribution. This stimulates reinvestment and business growth. One of most competitive systems in region.
Model Benefits
Companies pay 0% tax on undistributed profits. Can reinvest all profit without taxes. Tax of 15% only when paying dividends.
When company distributes dividends, pays 15% corporate tax. Plus 5% tax for individual recipient. Total 19.25% vs usual 35%+ in Europe.
Innovative startups can get status with 5% corporate tax instead of 15% for first 10 years. Plus employee income tax exemption first years.
International IT companies pay 5% corporate tax instead of 15%. Employee salary tax — 5% instead of 20%. Very attractive for IT sector.
Practical Application
Can defer taxation for years or decades, reinvesting profits. No time limit. Ideal for business growth.
Company asset revaluation not taxed. Increase in property or investment value doesn't create taxable event until distribution.
When selling company, rules are more complex. For resident individuals, selling shares of Georgian company may be taxed, foreign — not. Details depend on structure.
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