---
title: "Corporate Tax Planning"
url: "https://legal.ge/en/service/tax-law-en/corporate-tax-planning-en"
field: "Tax Law"
description: "Corporate tax planning: distributed profit, the 0.85 coefficient, the interest ceiling and the 5-year loss carryforward. Legal.ge."
reviewed: "2026-06-27"
updated: "2026-10-23"
publisher: "legal.ge"
---

# Corporate Tax Planning

> Source: legal.ge, https://legal.ge/en/service/tax-law-en/corporate-tax-planning-en

## Who Pays Profit Tax and What Is Taxed

Taxpayers of profit tax are a resident enterprise and a non-resident enterprise that carries on activity in Georgia through a permanent establishment or receives income from a source in Georgia, as established by Article 96. The taxable object of a resident enterprise is distributed profit, an expense or other payment not connected with economic activity, gratuitous supply of goods or services, and representative expenses above the established limit. This means that undistributed profit remains in the business, and planning therefore rests on choosing the moment of distribution. Non-cash payments become taxable at market price — without value added tax where the market price includes it.

A separate rule applies to an organization carrying on economic activity: its taxable objects are an expense or payment not connected with the activity or not arising from the organization’s purpose — including one not connected with charitable activity or not arising from the purpose of a grant agreement — as well as gratuitous transfers and representative expenses above the limit. For a non-resident’s permanent establishment, the object is determined by the expenses and costs arising from the activity of that establishment.

The full text is available on legal.ge after signing in: https://legal.ge/en/service/tax-law-en/corporate-tax-planning-en

### Who is a profit tax payer?

A resident enterprise and a non-resident enterprise operating through a permanent establishment or receiving Georgian-source income.

### What is the distributed-profit taxation model?

Distributed profit and unrelated payments are taxed; retained profit is not taxed until distribution.

### How does the 0.85 coefficient work?

The taxable amount from an unrelated expense is obtained by dividing the expense by 0.85.

### For how long is a loss carried forward?

Excess deductions are carried forward for up to 5 years and covered against future income.

### Is documentary confirmation of expenses mandatory?

Yes, unless the Code provides otherwise; exceptions are set by the Minister of Finance.