Dividend Tax in Georgia: The 5% Withheld at Source
You have profit sitting in a Georgian company and you want to take it out. A dividend to an individual shareholder is taxed at 5%, withheld by the company when it pays, and for a Georgian tax resident individual that is the end of the matter. That 5% sits on top of the 15% profit tax the payout has already triggered. Here is what each layer costs, and when neither applies.
- A Georgian resident company withholds 5% at source on a dividend paid to an individual, under Article 130(1) of the Tax Code.
- For a Georgian tax resident individual the 5% is final: the dividend is not added to gross income and does not go on an annual return.
- The company's own profit tax comes first, at 15% on the payment divided by 0.85, which is 17.65% of the sum the shareholder is handed.
- GEL 100,000 set aside for distribution reaches an individual shareholder as GEL 80,750. Total tax GEL 19,250, or 19.25%.
- A non-resident shareholder is withheld at the same 5%, while a dividend to another Georgian company carries nothing at all.
The 5% dividend tax and who withholds it
A dividend paid by a Georgian resident company to an individual is taxed at source at 5%, under Article 130(1) of the Tax Code of Georgia. The paying company is the tax agent under Article 154(1)(g), so it takes the 5% off, sends it to the budget and pays the shareholder the rest.
For a Georgian tax resident individual, that 5% is the whole liability. Article 130(3) keeps a taxed dividend out of gross income, and the gross income box of the annual income tax return expressly leaves out dividends a Georgian enterprise has already taxed at source.
The moment that triggers the tax is payment. Article 130(1) taxes dividends "paid", and Article 154(3)(a) fixes the transfer to the budget at the moment the amount reaches the shareholder, or on the last day of the month for a payment in non-monetary form.
A dividend is wider than a bank transfer. It is any income a shareholder receives from their shares as a result of a profit distribution, whether or not in proportion to the holding, and a distribution in kind counts, taken at market price excluding VAT. Payments on liquidation or a share buy-back up to the partner's paid-in capital contribution are not dividends.
What a dividend costs once profit tax is counted
Before the 5% is touched, the payout itself is a taxable object for the company. Georgia taxes distributed profit rather than profit as it is earned, so the 15% tax on distributed profit falls due on the distribution and not on the trading year that produced it. The taxable amount is the payment divided by 0.85, which makes the profit tax 17.65% of the sum the shareholder is handed.
Say the company sets aside GEL 100,000 to distribute.
| Step | Amount |
|---|---|
| Set aside for distribution | GEL 100,000 |
| Profit tax at 15% | GEL 15,000 |
| Dividend paid to the shareholder | GEL 85,000 |
| Dividend tax withheld at 5% | GEL 4,250 |
| Reaching the shareholder | GEL 80,750 |
| Total tax | GEL 19,250, or 19.25% |
The arithmetic runs from the dividend, not from the GEL 100,000. GEL 85,000 divided by 0.85 is GEL 100,000, and 15% of that is the GEL 15,000 of profit tax, which is why GEL 100,000 set aside pays a dividend of GEL 85,000 and not of GEL 100,000.
None of that tax is charged until the money moves. Profit kept in the company is not taxed at all, so the number to plan against is the distribution, not the annual result.
An individual entrepreneur has nothing to distribute, because the money is already theirs when the client pays. The 19.25% is a company figure and has no equivalent for a person trading in their own name.
Dividends paid to a non-resident shareholder
The rate does not change when the shareholder lives abroad. Article 130(1) covers dividends paid to a natural person, to a non-commercial legal person and to a non-resident enterprise, and Article 134(1)(a) puts a non-resident's Georgian dividend at the same 5%. A dividend from a Georgian resident company is Georgian-source income under Article 104(1)(f), which is what brings a non-resident inside the charge at all.
The 15% rate for preferential tax countries does not reach a dividend. Article 134(1.1) lifts the rate to 15% on interest, royalties and other Georgian-source payments made to a person registered in such a country, and dividends under Article 134(1)(a) are not on that list.
Georgia has 58 double taxation treaties in force, listed by the Ministry of Finance, and a treaty can cut the 5% at source or remove it for a shareholder resident in the other country. What each one gives varies. Some take the Georgian tax off a dividend altogether, and others set a lower rate that turns on how much of the company the shareholder holds and how much was invested in it. Which of those a shareholder in a treaty country gets is decided by that country's own text.
Relief on Georgian withholding is given at source by the payer and reported afterwards. Under Minister of Finance Order No 633, the company applies the treaty rate when it pays, then files Form No 1, the tax agent's information on the reduced or waived withholding, before 1 April of the following year. The recipient's residency certificate from its own tax authority goes with the form, together with a notarised Georgian translation of it. That certificate needs no apostille and no legalisation, and the form goes in electronically from the taxpayer's page on rs.ge.
2 conditions decide whether the relief holds. The first is beneficial ownership: the recipient needs full rights to use and dispose of the income and must not be bound to pass it to anyone else, so an agent or a nominal holder does not qualify. The second is purpose, and relief can be refused where the form and substance of the arrangement show that its main purpose was tax avoidance.
A shareholder's own residence and holding decide which treaty applies and what the company has to file to support the rate it used. Send us the details and David Sisvadze sets out the answer in a written opinion he signs.
The refund route is the fallback, and the non-resident starts it, not the company. Where the full 5% was withheld, Form No 2 is filed by the recipient or their representative, in 1 copy, with the residency certificate and notarised translation, before the limitation period expires.
When no tax is withheld on a dividend
Not every dividend carries the 5%. The 5 exemptions below sit in Article 130 itself and in the status regimes, and they turn on who receives the dividend or which profit it came out of.
| Dividend | Withheld | Basis |
|---|---|---|
| Paid to another Georgian company, other than an individual enterprise | 0% | Art 130(2) |
| Paid out of 2023 onward profits of banks, credit unions, microfinance organisations and loan providers | 0% | Art 130(8) |
| Paid out of 2025 onward profits of gambling operators taxed at 20% | 0% | Art 130(9) |
| Paid by an international company | 0% | Art 23(8) |
| Paid by a free industrial zone enterprise | 0% | Art 130(7) |
The first row is the one that shapes a group structure. A dividend moving from a Georgian trading company to a Georgian holding company is outside the withholding under Article 130(2), and outside the paying company's profit tax object under Article 98.1(2)(c), so both layers wait until the money leaves for an individual.
Behind the 2 rows on bank and gambling profits sits a higher profit tax rate. Banks, credit unions, microfinance organisations and loan providers pay profit tax at 20% rather than 15%, and so do slot machine halls and online games of chance on their Georgian-player income.
Virtual zone status is not on the list. The Code gives a virtual zone person no dividend exemption, so the 5% applies as usual when it distributes to an individual, a non-commercial legal person or a non-resident company.
The other withholding rates
Dividends are one line of a wider system. The same company withholds on interest, royalties and a list of payments to non-residents, and those rates are not 5% across the board.
| Payment | Rate | Who it applies to |
|---|---|---|
| Dividend | 5% | Individuals, non-commercial legal persons and non-resident enterprises (Art 130(1)) |
| Interest | 5% | Individuals, and non-residents with no Georgian permanent establishment (Art 131(1)) |
| Interest from a licensed financial institution, such as a bank deposit | 0% | Art 131(5) |
| Interest on State, National Bank, Deposit Insurance Agency and listed international financial institution debt securities | 0% | Art 82(1)(s) |
| Royalty | 20% | Resident individual not registered for VAT (Art 132(1)) |
| Royalty | 5% | Non-resident with no Georgian permanent establishment (Art 134(1)(b1)) |
| Other Georgian-source payments | 10% | Non-resident with no Georgian permanent establishment (Art 134(1)(e)) |
| Salary | 20% | Non-resident with no Georgian permanent establishment (Art 134(1)(f)) |
| Interest, royalties and other Georgian-source payments | 15% | Person registered in a preferential tax country (Art 134(1.1)) |
The royalty rate turns on who is being paid. A royalty paid to a resident individual who is not registered for VAT is withheld at 20%, against 5% on the same payment to a non-resident.
Interest carries 2 exemptions of its own. Interest paid by a licensed financial institution, a bank deposit being the everyday case, is neither taxed at source nor included in the individual's gross income, and interest on debt securities of the State, the National Bank, the Deposit Insurance Agency and listed international financial institutions is exempt outright.
All of this is what a Georgian payer takes off a payment it makes. A dividend arriving from a company registered abroad is not Georgian-source income, so Article 82(1)(u) leaves it untaxed in a Georgian tax resident individual's hands, and that article carries no exception for a company in a preferential tax country. The preferential-country rules bite on payments leaving Georgia, not on money arriving.
Declaring and paying what you withheld
The company carries both duties, and they fall on different dates. The withheld tax goes to the budget at the moment the dividend is paid, and on the last day of the month where the distribution is in non-monetary form.
The declaration is monthly. A tax agent files a return on the payments it made no later than the 15th of the month following the month of payment, on the same cycle as the return an employer files on salaries and the tax withheld from them.
Slipping on either costs money. A return filed up to 2 months late carries a fine of 5% of the tax due under it, rising to 10% after 2 months, and unpaid tax runs at 0.05% a day. A period stays open to audit for 3 years counted from the end of the calendar year audited, so a dividend paid in 2026 is reachable until the end of 2029.
Withholding at source puts the obligation on the company, not on the shareholder. Pay a dividend gross and the company still owes the 5%, with 0.05% a day running on it from the payment date, while the shareholder has already had the full amount. The duty is the tax agent's under Article 154(1)(g), so the bill lands on the company that paid.
Frequently asked questions
Are dividends taxed in Georgia?
Yes. A dividend paid by a Georgian resident company to an individual is taxed at source at 5% under Article 130(1), and the company withholds it before paying. For a Georgian tax resident individual the 5% is final, so nothing further is due when the money arrives.
What is the dividend tax rate in Georgia?
5%, withheld by the company that pays. The rate is the same for a resident individual and for a non-resident shareholder with no Georgian permanent establishment. A treaty can reduce it, and some dividends carry nothing at all.
What is the total tax on dividends from a Georgian company?
19.25% of the profit distributed. The 15% tax on distributed profit takes GEL 15,000 out of GEL 100,000 set aside, the 5% withholding takes GEL 4,250 of the resulting GEL 85,000 dividend, and GEL 80,750 reaches the shareholder.
Do I pay dividend tax in Georgia as a foreign shareholder?
Yes, at the same 5% under Article 134(1)(a), because a dividend from a Georgian resident company is Georgian-source income. A double taxation treaty may reduce or remove it, and the Georgian company applies the treaty rate when it pays, then files Form No 1 with your residency certificate before 1 April of the following year.
What is the withholding tax rate in Georgia on interest and royalties?
Interest paid to an individual is withheld at 5%, and at 0% where it comes from a licensed financial institution. A royalty is withheld at 20% for a resident individual not registered for VAT and at 5% for a non-resident with no Georgian permanent establishment. Interest, royalties and other Georgian-source payments to a person registered in a preferential tax country are withheld at 15%.
Do I declare a Georgian dividend on my annual return?
No, where it was taxed at source. Article 130(3) makes the taxed dividend final for a resident individual and keeps it out of gross income, and the gross income box of the annual return excludes dividends a Georgian enterprise has taxed at source.
Are dividends from a Georgian bank's profits taxed?
No, where they come out of profits earned from 2023 onward. Article 130(8) removes the withholding on distributions from those profits of banks, credit unions, microfinance organisations and loan providers, which are taxed at 20% profit tax rather than 15%.
What is withheld on payments to a company in a preferential tax country?
15%, under Article 134(1.1), on interest, royalties and other Georgian-source payments. Dividends are not in that list, so a dividend to a shareholder in such a country stays at the ordinary 5%.
Is interest on a Georgian bank deposit taxed?
No. Interest paid by a licensed financial institution is not taxed at source and is not included in the individual's gross income under Article 131(5). Interest on State, National Bank, Deposit Insurance Agency and listed international financial institution debt securities is exempt as well.