Georgia's tax system is considered one of the simplest and most predictable in the region: low rates, few taxes, clear rules and a convenient online portal, rs.ge. This overview gathers all the key 2026 rates — income tax, the Estonian-model corporate tax, VAT, dividends and special regimes — so you can plan your business structure or personal finances.
Georgia's Main Taxes: All Rates at a Glance
- Personal income tax — 20% (flat rate).
- Corporate tax — 15%, but on the "Estonian model" (more on this below).
- VAT — 18%, with mandatory registration at turnover of 100,000 GEL.
- Dividend tax — 5%.
- Tax on interest and royalties — 5%.
Georgia does not apply a progressive income tax scale, which simplifies calculations for both locals and foreigners.
Corporate Tax and the "Estonian Model"
Georgia's defining feature is that the 15% corporate tax is paid not on earned profit, but only when it is distributed (paid out as dividends). This is the so-called Estonian model.
What this means in practice:
- While profit stays in the company and is reinvested, no tax arises.
- The 15% tax is charged at the moment profit is distributed to shareholders.
- In addition, when dividends are paid to an individual, a 5% dividend tax is withheld.
This model is especially advantageous for growing companies that put profit back into development rather than withdrawing it immediately.
Taxes for Individuals
The standard income tax rate is 20%. It applies to salaries and most income of residents.
However, Georgia offers preferential regimes that substantially reduce this rate:
Small Business Status (1%)
A sole proprietor with Small Business Status pays 1% of turnover on revenue up to 500,000 GEL per year (for agritourism — up to 700,000 GEL). Above the limit it's 3%.
Micro Business (0%)
With turnover up to 30,000 GEL per year and no employees, the rate is 0%.
VAT: When the Obligation Arises
The VAT rate in Georgia is 18%. VAT registration is mandatory once turnover reaches 100,000 GEL over any continuous 12 months. Below that threshold, registration is voluntary.
| Metric | Value |
|---|---|
| VAT rate | 18% |
| Mandatory registration threshold | 100,000 GEL |
| Reporting | monthly |
Special Tax Regimes for Business
Georgia offers several regimes that make it competitive for IT and manufacturing:
- Virtual Zone Person (IT) — 0% corporate tax on income from IT services to foreign clients; 5% when profit is paid out as dividends.
- International Company Status (ICS) — 5% income tax for employees instead of 20%, and 5% on foreign income (requires 2+ years of IT experience and a real office).
- Free Industrial Zones (FIZ) — Kutaisi, Tbilisi, Poti: relief on profit tax, VAT and property tax for manufacturing and export.
Tax Residency
An individual typically becomes a Georgian tax resident after staying more than 183 days within a 12-month period. Residency affects which income is taxed and where, so for international activity it's worth working through the question of double taxation in advance.
Important: tax rules in Georgia change. Before making decisions, verify them on the official rs.ge portal or consult a tax specialist.
Conclusion
Georgia's tax system combines low rates, the Estonian model of corporate tax, and generous special regimes for IT and manufacturing. This makes the country convenient for both entrepreneurs and investors. To select the optimal structure for your activity and avoid mistakes, the Angels Investment specialists are ready to provide a personal consultation.
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FAQ
Is there tax on undistributed profit?
No. Under the Estonian model, the 15% corporate tax only arises when profit is distributed.
What is the income tax rate in Georgia?
The standard rate is 20% (flat). Preferential regimes can lower it to 1% or 0%.
When do you need to register for VAT?
Once turnover reaches 100,000 GEL over 12 months, registration is mandatory.
What is the dividend tax?
5% when dividends are paid; interest and royalties are also taxed at 5%.
Does Georgia tax worldwide income?
A resident is taxed according to residency rules; many types of foreign income are not taxed under certain conditions. This matter requires individual analysis.