Georgia is considered a low-tax country, and its withholding regime bears that out: five percent on dividends, interest and royalties is remarkably little by international standards. What matters more than the level, though, is the classification — which payment falls into which rate, who remits it, and where the rate drops to zero or jumps to fifteen percent. That is where the mistakes happen, because the party obliged to withhold is the Georgian company and not the foreign recipient.
The rates at a glance
The rates below apply to Georgian-source income of non-resident recipients without a permanent establishment in Georgia:
| Type of payment | Rate |
|---|---|
| Dividends | 5 % |
| Interest | 5 % |
| Royalties | 5 % |
| Oil-and-gas subcontractors | 4 % |
| Services rendered in Georgia | 10 % |
| International transport and communication | 10 % |
| Other Georgian-source income | 10 % |
| Insurance and re-insurance | 0 % |
| Interest, royalties and other income to blacklisted recipients | 15 % |
Two things stand out. First: capital is cheaper than work. Whoever supplies money — as a shareholder, lender or licensor — pays five percent; whoever supplies a service pays ten. Second, the catch-all category “other Georgian-source income” also sits at ten percent. Anything that cannot be assigned to one of the favourable categories lands in the higher rate, which makes classifying a payment rather more than a formality.
Who remits — and who it hits
Withholding tax is deducted and remitted by the payer in Georgia. For the foreign recipient it is therefore final in almost all cases: nothing to declare in Georgia, simply less money received.
The practical consequence is routinely underestimated. When your Georgian company pays a foreign service provider’s invoice, it is the party obliged to withhold. If the deduction is missed, it is your company that pays up — not the recipient, who received the full amount long ago. And because the recipient usually expects a net figure contractually, you end up bearing the tax twice: once as the deduction and once as the top-up.
The exemption that affects most readers
For individuals, the most important rule is a non-rule: interest on bank deposits is exempt from withholding. When a licensed Georgian financial institution pays interest to an individual, nothing is deducted and the amount does not count towards taxable gross income.
This is not a loophole but a deliberate legislative choice to keep savings inside the domestic banking system. The five percent rule for interest targets other arrangements — shareholder loans, private loans, intra-group financing. What follows for a German, Austrian or Swiss tax return is worked through in taxing Georgian interest.
Dividends: two stages, not one
Distributions by a Georgian company stack two layers, and anyone looking only at the withholding rate underestimates the burden:
- Retained profits stay untaxed Estonian model — no corporate income tax while the profit stays in the company
- 15 % corporate income tax on distribution the tax is triggered by the distribution, not by earning the profit
- A further 5 % withholding tax on the dividend to individuals and foreign companies
- Distribution to a resident Georgian company treated differently — the cascade does not apply in every configuration
- International Company, special zone, investment fund separate exemptions — worth checking case by case
- Double-taxation treaty can cut the dividend withholding rate to zero, sometimes tied to shareholding or investment thresholds
The Estonian model is the real advantage of this structure, and it is one of timing: as long as profits are reinvested, the full amount keeps working. Withdraw every euro immediately and you give up precisely that — arriving at a total burden that has nothing left to do with the “one percent country” image. The 1 percent rate applies to sole traders with small-business status, not to companies; the distinction is in the 1% tax in Georgia and the structural question in Virtual Zone or International Company.
The blacklist
Payments of interest, royalties or other Georgian-source income to recipients registered in a preferentially taxed jurisdiction listed by the Georgian Ministry of Finance attract 15 percent instead of five or ten.
This is not a fringe issue for exotic constructions. Run a holding or licensing company in a classic offshore jurisdiction and bill a Georgian company from there, and you may have tripled the rate on a recurring payment stream. The list is maintained administratively and can change — it belongs in the review before the structure is set up, not after the first royalties have flowed. What a robust ownership chain looks like instead is shown in holding and director structure.
Frequently asked questions
What is the withholding tax rate in Georgia?
It depends on the type of payment. Five percent applies to dividends, interest and royalties, ten percent to services rendered in Georgia, international transport and communication and other Georgian-source income, four percent to oil-and-gas subcontractors, and zero percent to insurance and re-insurance. Payments to recipients registered in jurisdictions on Georgia's blacklist attract 15 percent.
Who withholds the tax?
The payer in Georgia. The tax is deducted and remitted at source rather than declared by the recipient — for a foreign recipient without a permanent establishment in Georgia it is generally final. Your Georgian company is therefore itself liable for remitting it, and a failure falls back on the company, not on the recipient.
Is there withholding tax on interest from my Georgian bank account?
No. Interest paid by a licensed Georgian financial institution to an individual is exempt from withholding and does not count towards taxable gross income. The five percent rule concerns other interest payments — shareholder loans or loans between private parties, for instance.
How are dividends from a Georgian company taxed?
In two stages. At company level the Estonian model applies: profits stay untaxed as long as they are retained and trigger 15 percent corporate income tax only on distribution. The distribution to an individual or a foreign company then attracts a further five percent withholding tax. Distributions to a resident Georgian company are treated differently, as are payments by International Company and special-zone entities and investment funds.
Can a double-taxation treaty reduce the withholding tax?
Yes, and it is the most common lever. Georgia maintains a broad treaty network, and individual treaties cut the rate on dividends or interest as far as zero — sometimes tied to a shareholding threshold or an investment volume. What governs is always the wording of the specific treaty plus a certificate of residence; there is no blanket rate for "the EU".
What is the Georgian blacklist?
A list of preferentially taxed jurisdictions maintained by the Ministry of Finance. Payments of interest, royalties or other Georgian-source income to recipients registered there attract 15 percent instead of 5 or 10. Anyone running a structure through a classic offshore jurisdiction should check this before the first payment — the surcharge hits recurring flows, not just one-offs.
Does withholding tax affect me under the 1 percent status?
Not in your role as a sole trader with small-business status, where you tax turnover at one percent and distribute nothing. It becomes relevant as soon as you make payments abroad as a Georgian company — to service providers, licensors, lenders or shareholders. Then you are the party obliged to withhold.
This article is general information and does not constitute legal or tax advice. The rates given apply to Georgian-source income of non-resident recipients without a permanent establishment in Georgia; treaty protection, special regimes and the treatment of resident recipients differ. The blacklist is maintained administratively and may change. Have your specific payment flows reviewed before implementation. Last updated August 2026; rules may change.