A profitable company and a personal bank balance are two different things. Plan how money leaves the company before making the transfer, and the tax calculation becomes much easier to follow.
Profit tax follows the transaction
For an ordinary Georgian company taxed under the distributed-profit system, the standard profit-tax rate is 15%. Qualifying profits can remain in the business for reinvestment, while distributions and specified payments trigger tax. The accounts should explain what each payment represents.
Review dividends, personal expenditure paid by the company, transfers without a commercial return and amounts advanced to owners. A payment description in the bank portal should agree with the contract, company decision and accounting entry behind it.
Calculate the company cost and the shareholder receipt
A dividend has two tax calculations: the company’s profit tax and any withholding from the shareholder’s dividend. For a standard distribution to an individual under the ordinary domestic rules, the company applies the 15/85 calculation and withholds 5% from the declared dividend.
| Illustrative ordinary LLC distribution | GEL |
|---|---|
| Declared gross dividend | 10,000.00 |
| Company profit tax: 10,000 ÷ 0.85 × 15% | 1,764.71 |
| Dividend withholding: 10,000 × 5% | 500.00 |
| Net amount paid to the individual shareholder | 9,500.00 |
| Total cash required from the company | 11,764.71 |
This example uses an ordinary LLC, a full-year current-profit distribution and the standard domestic rates. A special tax status, the shareholder’s identity or historic taxed profits changes the calculation and should be reflected in the dividend decision.
Give every owner payment its proper name
Salary pays for work. A dividend distributes profit. Reimbursement repays a documented business expense. A loan creates a repayment obligation. Choose the treatment that matches the facts, then record it consistently.
Where a shareholder has paid company expenses personally, collect the invoices and proof of payment before reimbursing the amount. For a loan, record the purpose, terms, interest treatment and repayment history. These details matter more than a convenient label added after the transfer.
Make retained earnings useful management information
Before declaring a dividend, reconcile the bank balances, customer debts, supplier liabilities and tax account. Check which profits are available for distribution and what cash the business needs for salaries, suppliers and investment.
A shareholder should be able to read the accounts and understand why the profit figure differs from the cash in the bank. Unpaid invoices, equipment purchases, exchange differences and loan movements often explain the difference.
Decide whether the starting figure is a declared or a net dividend
A shareholder may ask to receive a round amount in their bank account. The company needs to calculate the declared dividend, the withholding and its own profit tax from that request. Use the same starting figure in the resolution, accounting entries and payment instructions.
| Calculation | Declared dividend of 10,000 GEL | Target net receipt of 10,000 GEL |
|---|---|---|
| Declared dividend | 10,000.00 GEL | 10,526.32 GEL |
| Dividend withholding at 5% | 500.00 GEL | 526.32 GEL |
| Net paid to shareholder | 9,500.00 GEL | 10,000.00 GEL |
| Company profit tax: declared dividend × 15/85 | 1,764.71 GEL | 1,857.59 GEL |
| Company cash required for dividend and profit tax | 11,764.71 GEL | 12,383.91 GEL |
The illustration uses the ordinary Georgian distributed-profit rules and the ordinary individual dividend withholding rate. The recipient’s legal status, a treaty or an approved special regime can change the calculation. Amounts are rounded to two decimal places.
Keep the corporate decision with the tax calculation
Confirm the accounts, the amount available for distribution, the recipient and the required corporate approval. Prepare a payment schedule showing what goes to the shareholder and what goes to the Revenue Service. The accounting records should explain the dividend payable and the resulting taxes.
Where the business has foreign-currency bank accounts, reconcile the GEL tax calculation with the payment currency and the applicable conversion treatment. Keep the shareholder decision, calculation, return and bank records in one distribution file.
Classify other owner payments separately
A repayment of a documented loan, a salary, an expense reimbursement and a dividend have different legal and tax foundations. Record the reason and evidence for each transfer. Review old shareholder balances at the year-end close so the company can explain what it owes, to whom and why.
Planning a dividend or an owner withdrawal?
Send the latest accounts, the intended amount and the shareholder details. We will calculate the payment, prepare the tax treatment and coordinate the supporting corporate documents.
Request a consultationFrequently asked questions
Why is the company profit tax more than 15% of the declared dividend?
The ordinary distributed-profit calculation grosses up the declared distribution by dividing it by 0.85, then applies 15%. A declared 10,000 GEL dividend therefore produces 1,764.71 GEL of company profit tax.
Which documents should support a dividend?
Keep the approved financial information, the company decision declaring the dividend, the shareholder details, the tax calculation and the payment evidence together.
Legal basis: Tax Code of Georgia, including Articles 97–98 on company profit taxation and Article 130 on dividends.