Dividend tax in Georgia is a single flat rate, 5%, and most people stop reading right there. That is a mistake, because the 5% is one line inside a wider withholding system that reaches interest, royalties and a long list of other payments to non-residents, each at its own rate, several of which are more expensive than the dividend rate everyone asks about first. Here is the 5% in full, and the withholding rules around it that decide what a payment to a non-resident actually costs.
The 5% dividend withholding: how it actually works
A dividend is a distribution of profit a Georgian company has already earned, and when it is paid out, the company withholds 5% at source before the recipient ever sees the money. This applies uniformly: a Georgian individual shareholder, a foreign individual shareholder and a foreign corporate shareholder are all withheld at the same 5%, with no distinction by residency at this stage. The company remits the withheld amount to the Revenue Service on the same monthly cycle as every other obligation, covered in full in Georgia's tax deadlines, and pays the shareholder the net amount.
This sits downstream of a separate charge on the company itself. Before any dividend can be paid, the company's own profit is taxed at 15% corporate income tax the moment it is distributed - a rate and a mechanism we cover in full in corporate income tax in Georgia. The 5% covered here is the second, smaller layer, applied to what is actually paid out after that 15% has already been deducted.
What counts as a dividend, and what is exempt
Article 130 of the Tax Code of Georgia sets the 5% rate and carves out two situations that sit outside it entirely, both of which matter for how a Georgian group or a holding structure is actually taxed.
Dividends paid between two Georgian companies are not subject to the 5% withholding. If a Georgian subsidiary pays a dividend up to its Georgian parent, no withholding applies at that step - the charge only actually bites once the money reaches an individual or leaves Georgia to a foreign recipient.
Dividends sourced from negotiable securities are exempt outright, regardless of who receives them. This sits alongside the 0% capital gains treatment negotiable securities already get under Georgia's personal income tax rules, which our taxes in Georgia guide covers as part of the full rate table.
Dividends paid in kind count too
The 5% is not limited to a cash payment. A dividend paid in non-monetary form, such as transferring an asset or forgiving a debt the company owed the shareholder, is treated the same way as a cash distribution and withheld at the same 5%, valued at the market value of whatever actually changed hands. This matters most for owners assuming that only an explicit bank transfer labelled "dividend" can trigger the withholding - it cannot be sidestepped by structuring the same economic benefit as something else, and the categories of deemed distribution covered in our guide to corporate income tax exist for exactly this reason.
Dividends to non-residents, and what a treaty actually changes
The domestic 5% rate applies to a non-resident shareholder exactly as it does to a resident one - there is no automatic increase for paying a dividend abroad. What a tax treaty can do is reduce that rate further, and Georgia's network of more than 55 double taxation treaties means a meaningful share of shareholders are entitled to something lower than 5%, sometimes 0%, depending on the specific treaty and often on a minimum ownership or investment threshold written into it.
The part people assume incorrectly is that this happens automatically. It generally does not: claiming a reduced treaty rate typically requires filing the right paperwork with the Revenue Service in advance of the payment, not simply asserting the treaty applies afterward. A shareholder who never files for the reduction pays the standard 5% by default and has, in practice, left the treaty benefit unclaimed rather than been denied it. Our country-by-country guides work through what a specific home country's treaty with Georgia actually says, since the terms vary meaningfully by country rather than following one template.
Withholding tax generally: interest
Interest paid to an individual, or to a non-resident with no permanent establishment in Georgia, is withheld at 5% as the general rule. This covers the ordinary case of a Georgian company paying interest on a loan to a foreign lender or to an individual, whether that lender is a bank, a related party or the company's own shareholder.
Interest sits close to corporate income tax in one specific way worth knowing: interest a company pays above an annual threshold the Ministry of Finance sets, currently 24%, is not treated as an ordinary deductible expense at all. It is instead treated as a deemed distribution and taxed at the company's own 15% corporate rate, on top of whatever withholding applies to the interest payment itself - a detail covered in full in our guide to corporate income tax.
Withholding tax generally: royalties
Royalties carry two different rates depending entirely on who receives them, which is the detail most summaries flatten into one number.
Royalties paid to a resident individual who is not VAT-registered are withheld at 20%, the same rate as ordinary personal income tax. Royalties paid to a non-resident are withheld at a lower 5% instead. The gap is large enough that it is worth confirming which category a specific royalty payment actually falls into before assuming either rate applies by default.
Other payments to non-residents: services, transport and everything else
Beyond dividends, interest and royalties, a wider category of Georgian-source payments to non-residents carries its own withholding rates, and most of them sit well above the 5% dividend rate that gets all the attention.
| Payment type | Withholding rate |
|---|---|
| Dividends | 5% |
| Interest | 5% |
| Royalties (to a non-resident) | 5% |
| Royalties (to a resident individual, not VAT-registered) | 20% |
| Services performed in Georgia by a non-resident | 10% |
| International transport and communication | 10% |
| Other Georgian-source income | 10% |
| Insurance and re-insurance premiums | 0% |
| Oil and gas subcontractor payments | 4% |
A Georgian company paying a foreign contractor for work physically performed here, rather than remotely from abroad, generally withholds at 10%, not at the 5% figure people remember from dividends. The same payment can separately trigger reverse charge VAT if the service is one Georgia treats as consumed here, which is a distinct 18% obligation running alongside withholding tax rather than instead of it - the mechanics of that overlap are covered in full in VAT in Georgia.
The 15% penalty rate for preferential-tax jurisdictions
Every rate above assumes the recipient is in an ordinary jurisdiction. Payments of interest, royalties or other Georgian-source income to a recipient registered in a country the Ministry of Finance treats as having preferential tax treatment are withheld at a flat 15% instead, overriding whatever the ordinary rate for that payment type would have been.
This is a deliberate anti-avoidance rate, aimed squarely at routing Georgian-source income through low-tax jurisdictions to avoid the ordinary withholding regime. It does not apply to dividends specifically covered elsewhere in this guide, but it reaches most of the other payment categories above, which makes the recipient's own jurisdiction worth checking before assuming any of the standard rates apply.
How this fits with corporate income tax and paying yourself
For an owner actually taking money out of a Georgian LLC, the 5% dividend rate is one half of a two-part cost, not the whole of it. Take a company with 100,000 GEL of profit it wants in the owner's hands as cash: the company first pays 15% corporate income tax on the distribution, 15,000 GEL, leaving 85,000 GEL actually paid out. That payment is then subject to the 5% withholding covered in this guide, 4,250 GEL, leaving the owner with 80,750 GEL. Together that is close to 19-20% all-in on a full payout, against 0% on anything left reinvested in the company.
| Step | Amount |
|---|---|
| Profit available for distribution | 100,000 GEL |
| Corporate income tax at 15% | 15,000 GEL |
| Paid out as the dividend | 85,000 GEL |
| Dividend withholding at 5% | 4,250 GEL |
| Owner receives | 80,750 GEL |
We work through the complete comparison against taking a salary instead, including the exact take-home numbers on a real distribution, in paying yourself from a Georgian company. For a wider comparison against Small Business Status and International Company Status, whose 0% dividend treatment can outweigh a higher headline profit rate for a company distributing rather than reinvesting, see Georgia's tax regime comparison.
Where the 5% does not apply at all: International Company status
An ordinary LLC has no way around the 5% once it decides to distribute. A company holding International Company status is a genuine exception: alongside a reduced 5% profit tax and a 5% wage tax on staff, dividends it pays out are taxed at 0% rather than the standard 5%. The trade-off is qualification, not paperwork - International Company status requires at least two years of documented experience in a permitted activity and real local substance already in place, so it is not an option for a brand-new company regardless of how attractive the dividend treatment looks on paper.
Virtual Zone status, by contrast, changes none of this. It exempts qualifying exported IT income from corporate tax entirely, but ordinary dividend withholding rules still apply in full once a Virtual Zone company actually distributes what it has earned. The two regimes are frequently confused for exactly this reason, and knowing which one you hold, or would qualify for, is worth confirming before assuming either one changes your dividend tax position.
Claiming a reduced treaty rate: what actually has to happen
Reduced withholding under a treaty is not automatic on either the dividend rate or the other categories above. In practice, claiming it means filing the relevant certification with the Revenue Service, generally including proof of tax residency in the treaty country, before or at the time of payment. A company that pays the standard rate and only later discovers a treaty applied has, in most cases, left money on the table rather than been overcharged - the standard rate is the correct default absent an active claim.
Getting the paperwork right before the first payment, rather than after, is the difference between the reduced rate actually landing and simply knowing, after the fact, that it should have. Structuring this properly, alongside the underlying LLC registration itself, is usually cheaper to get right from the start than to unwind once the first dividend has already gone out at the wrong rate.
We work out which rate genuinely applies to a specific dividend, interest or royalty payment, whether a treaty reduces it, and what has to be filed in advance to actually claim that reduction.
See what it costs
Key takeaways
- Dividends from a Georgian company are withheld at 5%, applying equally to resident and non-resident recipients.
- Dividends between two Georgian companies, and dividends sourced from negotiable securities, are exempt from the 5% withholding.
- Interest is generally withheld at 5%; royalties are 20% to a non-VAT-registered resident individual but 5% to a non-resident.
- Services performed in Georgia, international transport and most other Georgian-source payments to non-residents are withheld at 10%, above the dividend rate.
- A 15% penalty rate overrides the standard rate for interest, royalties and other payments to recipients in preferential-tax jurisdictions.
- Treaty relief is not automatic - claiming a reduced rate requires filing in advance, not asserting it after the fact.
Frequently asked questions
What is the dividend tax rate in Georgia?
5%, withheld at source when a resident company pays a dividend, whether the recipient is a Georgian individual, a foreign individual or a foreign company. It applies on top of the separate 15% corporate income tax the company already paid on the distribution itself.
Do I pay dividend tax if the dividend goes to another Georgian company?
No. Dividends paid between two Georgian companies are exempt from the 5% withholding. The charge applies once the money reaches an individual or leaves Georgia to a foreign recipient.
Does a tax treaty automatically lower my dividend withholding?
Not automatically. Some treaties reduce the rate below 5%, sometimes to 0%, but claiming that generally requires filing the right paperwork with the Revenue Service in advance rather than assuming the reduced rate applies after payment.
What withholding rate applies to interest paid to a foreign lender?
5%, as the general rate for interest paid to an individual or to a non-resident with no permanent establishment in Georgia. Interest paid above the annual rate ceiling the Ministry of Finance sets is treated differently, as a deemed distribution taxed at the company's own 15% rate.
Why do royalties have two different rates?
Because the rate depends on who receives the royalty. A resident individual who is not VAT-registered is withheld at 20%, the same as ordinary personal income tax. A non-resident is withheld at a lower 5% instead.
What rate applies to paying a foreign contractor for work done in Georgia?
Generally 10%, under the category for services performed in Georgia by a non-resident, rather than the 5% figure people associate with dividends and interest. The same payment can separately trigger reverse charge VAT depending on what the service is.
What is the 15% rate for preferential-tax jurisdictions?
A penalty rate that overrides the ordinary withholding rate on interest, royalties and other Georgian-source income when the recipient is registered in a jurisdiction Georgia treats as having preferential tax treatment. It does not apply to the standard 5% dividend rate.
Is dividend tax the only cost of taking money out of a Georgian LLC?
No. The company first pays 15% corporate income tax on the amount it distributes, and the 5% dividend withholding applies to what is actually paid out afterward. Together, a full payout costs close to 19-20% all-in, against 0% on profit left reinvested.
Are dividends from negotiable securities really tax-free?
Yes. Dividends sourced from negotiable securities are exempt from the 5% withholding regardless of who receives them, which sits alongside the separate 0% capital gains treatment those securities already get.
Do I have to file anything to claim a reduced treaty rate on a dividend?
Yes, generally a certificate of tax residency and supporting documentation filed with the Revenue Service before or at the time of payment. Paying the standard rate first and asking about the treaty afterward is the common way this benefit goes unclaimed.
What is the withholding rate on insurance premiums paid to a non-resident?
0%. Insurance and re-insurance premiums are one of the few categories of Georgian-source payment to a non-resident that carry no withholding at all under the standard rules.