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EY
+995 (32) 215-8811 44 Kote Abkhazi Street Fax: +995 (32) 215-8822 Tbilisi 0105 Georgia
Principal Tax Contacts
Tato Chantladze
+995 (32) 215-8811, Ext. 2104 Mobile: +995 (591) 157-700 Email: tato.chantladze@ge.ey.com
Ekaterine Kiknadze +995 (32) 215-8811, Ext. 2114 Mobile: +995 (577) 797-808 Email: ekaterine.kiknadze@ge.ey.com
Tina Kachakhidze +995 (32) 215-8811, Ext. 2112 Mobile: +995 (599) 245-556 Email: tina.kachakhidze@ge.ey.com
Because of the rapidly changing economic and political situation in Georgia, frequent changes are introduced to the Tax Code of Georgia. As a result, readers should obtain updated information before engaging in transactions.
A. At a glance
Corporate Income Tax Rate (%) 15 (a) Capital Gains Tax Rate (%) 15 (b)
Withholding Tax (%)
Dividends 5 Interest 5 Royalties 5 (c)
Management Fees 10 (c) Income from International Transport or International Communications 10 (c) Income from Oil and Gas Operations 4 (c) Interest, Royalties and Payments of Other Georgian-Source Income to Companies
Registered in Low-Tax Jurisdictions 15 Payments of Other Georgian-Source Income 10 (c) Branch Remittance Tax 0
(a) Resident companies and permanent establishments of nonresident companies are not subject to tax on their income. They are subject only to tax at a rate of 15% on distributed profits and certain payments made. The tax rate is applied to the taxable object divided by a specified percentage (for further details, see Section B).
(b) Resident companies and permanent establishments of nonresident companies are not subject to tax on their capital gains received. They are subject only to tax at a rate of 15% on distributed profits. Nonresident companies without a permanent establishment in Georgia are subject to tax at a rate of 15% on their capital gains derived from Georgian sources. For further details, see Section B.
(c) These withholding taxes apply to payments to foreign companies.
B. Taxes on corporate income and gains
Corporate income tax. Resident companies and permanent establishments of nonresident companies are not subject to tax on their
generated but not yet distributed profits. They are subject only to tax on the following taxable objects:
• Distributed profits
• Expenses incurred and other payments not related to economic activity
• Free-of-charge supplies of goods or services and transfers of funds
• Representative expenses exceeding statutory limits prescribed by the Tax Code of Georgia (TCG)
Distributed profits. Distributed profit consists of cash or noncash dividends distributed by a legal entity to its partners or shareholders.
Activities that are not considered distributions of profits include, among others, the following:
• Distributions of dividends among Georgian legal entities
• Distributions of dividends received from foreign enterprises (other than companies registered in low-tax jurisdictions)
• Further distribution of dividends received by corporations, companies, firms and similar entities established under the legislation of a foreign country, regardless of whether they have legal entity status (other than permanent establishments of for eign enterprises), that have transferred their place of manage ment to Georgia
Repatriations of profits attributable to permanent establishments of nonresident entities are treated as distributions of profits. Profit attributable to a permanent establishment is a profit that the per manent establishment would have made if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions.
Distributions of profits include the following:
• Transactions conducted with related resident entities that are not subject to tax on distributions of profit if the contractual price of such transactions differs from the market price
• International controlled transactions that are not at arm’s length
• Transactions conducted with persons that are exempt from corporate income tax or personal income tax under the TCG if the contractual price of such transactions differs from the market price
Incurred expenses and other payments not related to economic activity. The TCG contains a list of expenses or payments that are subject to corporate income tax. Such expenses include, among others, expenses that are not documentarily proven or that were not incurred for the purpose of deriving profit, income or compensation. In addition, certain payments to persons registered in low-tax jurisdictions are taxable.
Free-of-charge supplies of goods and services and transfers of funds. Supplies that are not aimed at gaining profit, income or compensation are considered to be free of charge. In addition, a shortage of inventory or fixed assets is considered a free-ofcharge supply and is subject to corporate income tax.
Free-of-charge supplies of goods or services are exempt from tax under the following circumstances:
• The supply was taxed at the source of payment.
• The supply represents a donation to a charitable organization and does not exceed 10% of the net profit for the preceding calendar year.
• The recipient of the goods, services or funds is a state authority, municipal body or legal entity of public law.
• The recipient of the goods, services or funds is a resident enterprise or a nonresident enterprise conducting business in Georgia through a permanent establishment that is subject to tax on distributed profits as mentioned above.
Representative expenses. Representative expenses exceeding 1% of revenues or expenses for the preceding calendar year are tax able.
Commercial banks, credit unions, insurance companies, microfi nance organizations and pawnshops will be taxed on the four taxable objects mentioned above, effective from 1 January 2023. Until then, the tax base of these entities is determined as the dif ference between the gross taxable income and the amount of de ductions stipulated under the TCG.
Foreign legal entities without a permanent establishment in Georgia are subject to withholding tax on their Georgian-source income at a rate of 4%, 5%, 10% or 15% (see Section A).
The object of corporate income taxation of a nonresident enter prise earning income from the sale of property in Georgia that is not related to the activity of its permanent establishment in Georgia is the difference between the gross income earned from a Georgian source during a calendar year and the amount of the deductions with respect to the earning of the income.
The object of corporate income taxation of a nonresident enter prise earning remuneration for the lease or rental of property from a person who is not a tax withholding agent is the difference between the gross income earned from a Georgian source during the calendar year and the amount of the deductions with respect to the earning of the income.
Tax rate. The regular corporate income tax rate is 15%. To calcu late corporate income tax, the tax rate is applied to the taxable objects described above divided by 0.85.
Special types of enterprises. The Georgian tax law provides for beneficial tax treatment for enterprises operating in Georgia with the following statuses:
International Company
Special Trade Company
Free Industrial Zone Company
Virtual Zone Person
Tourist Enterprise
Agricultural Cooperative
Investment Fund
The Georgian Tax Authorities (GTA) grant the above statuses according to the rules defined by the Minister of Finance of Georgia or the Government of Georgia. The statuses are described below.
International Company. An International Company is a Georgian enterprise engaged in information technologies or maritime operations that performs certain activities defined by the decree of the Government of Georgia and earns income only from those activities. An International Company pays corporate income tax at a 5% rate.
Special Trade Company. An entity conducting its activities in an authorized warehouse may be granted Special Trade Company status for corporate income tax exemption purposes. A Special Trade Company may supply and re-export foreign goods from a customs warehouse, as well as purchase foreign goods from an entity without such status for further supply or re-export. A Special Trade Company may also derive income (including Georgian-source income) from other allowable activities if such income does not exceed the sum of GEL1 million and 5% of the customs value of foreign goods brought into Georgia. In addition, a Special Trade Company may derive income exempted from corporate income tax and from the sale of fixed assets used in economic activities for more than two years. A Special Trade Company is prohibited from importing or purchasing Georgian goods for further supply, rendering of services in Georgia to a Georgian entity, individual entrepreneur and/or to a permanent establishment of a foreign enterprise and operating a customs warehouse. The status of Special Trade Company is canceled for a calendar year if an authorized representative of such company submits an application to the GTA at least five business days before the beginning of the relevant calendar year. A Special Trade Company is exempt from corporate income tax on distrib uted profits received from allowable activities except for income received from the sale of fixed assets.
Free Industrial Zone Company. Free Industrial Zone Company status for tax purposes may be granted to a company operating in a Free Industrial Zone. Free Industrial Zone Companies primar ily engage in the manufacturing and export of goods outside Georgia from a Free Industrial Zone. The status of Free Industrial Zone Company is subject to cancellation if the company engages in activities prohibited by the law. Free Industrial Zone Companies are exempt from corporate income tax on distributed proceeds from activities allowed within a Free Industrial Zone.
Virtual Zone Person. Virtual Zone Person status for tax purposes may be granted to a company engaged in information technology activities. Virtual Zone Persons are exempt from corporate income tax on distributions of profits derived from the supply of selfproduced information technology outside Georgia.
Tourist Enterprise. Tourist Enterprise status for tax purposes may be granted to a company that builds a hotel for the purpose of the sale and leaseback of the assets, or part of the assets, of the hotel and uses the building in hotel operations. Distribution of profit
derived from the rendering of hotel services and the incurrence of expenses in the course of such activity by tourist enterprises are exempt from corporate income tax until 1 January 2026.
Agricultural Cooperative. Agricultural Cooperative status for tax purposes may be granted to a company in accordance with the Law of Georgia on “Agricultural Cooperative.” Agricultural Cooperatives are exempt from corporate income tax on distrib uted profits derived from the initial supply of agricultural prod ucts produced in Georgia before industrial processing of the products (that is, a change of commodity code occurs) until 1 January 2023.
Investment Fund. An Investment Fund is an enterprise estab lished in the form of a joint investment fund or investment com pany in accordance with the Law of Georgia on Investment Funds.
Profits distributed, expenses incurred and other payments not related to economic activity, free-of-charge supplies of goods or services or transfers of funds and representative expenses ex ceeding set statutory limits by the joint investment fund within the framework of the activities defined by the Law of Georgia on Investment Funds are not subject to corporate income tax.
Expenses incurred and other payments not related to economic activity, free-of-charge supplies of goods or services or transfers of funds and representative expenses exceeding set statutory limits by an investment company within the framework of the activities defined by the Law of Georgia on Investment Funds are not subject to corporate income tax.
If the recipient of a dividend is a nonresident or a natural person and if the investment company invests only in bank deposits and/ or financial instruments, except in the case of distributions of profits received from resident enterprises, distributions of profits by an investment company are taxed at 5%; otherwise, the rate is 15%; that is, the 15% rate applies when the investment company distributes the profit to a nonresident or a natural person, unless the investment company invests only in bank deposits and/or fi nancial instruments.
Distributions of profits by an investment company to a nonresi dent or a natural person are exempt from corporate income tax if the profits meet any of the following conditions:
• They are not paid out of Georgian-source income.
• They are paid out of income of a resident legal person from the supply of equity securities issued through a public offering in Georgia and admitted for trading on an organized market rec ognized by the National Bank of Georgia.
• They are paid out of income derived by a resident legal person from the sale of loan securities issued through a public offering in Georgia and admitted for trading on an organized market recognized by the National Bank of Georgia.
• They are paid out of surplus derived from the sale of loan secu rities issued by the government of Georgia or international financial institutions or are paid out of income received as interest from these securities or deposits placed in commercial banks.
Capital gains. No separate capital gains tax is imposed in Georgia. Capital gains derived by resident companies and permanent establishments of nonresident companies are not subject to corporate income tax until they are distributed.
Capital gains from the supply of treasury bonds are exempt from taxation.
In addition, the following types of capital gains derived by non residents without a permanent establishment in Georgia are exempt from taxation:
• Gains from the supply of bonds issued through a public offering by a resident entity in Georgia and admitted for trading on the organized market recognized by the National Bank of Georgia (NBG)
• Gains from the supply of equity securities issued through a public offering by a resident entity in Georgia and admitted for trading on the organized market recognized by the NBG
Administration. The reporting period for the entities subject to corporate income tax on distribution of profit is a calendar month. Such entities must submit a corporate income tax return and pay the respective tax by the 15th of the month following the reporting month.
The reporting period for commercial banks, credit unions, insur ance companies, microfinance organizations and pawnshops is a calendar year. Such entities must file an annual corporate income tax return and make a balancing payment of corporate income tax by 1 April of the year following the reporting year.
Interest is charged on late tax payments at a rate of 0.05% of the tax due for each day of delay. If the submission of a tax return is delayed for up to two months, the penalty is 5% of the tax payable based on this tax return. If submission of a tax return is delayed for more than two months, the penalty is 10% of the tax payable based on this tax return. A penalty is also imposed for the under statement of tax liability. If understated tax does not exceed 5% of the reported tax, a penalty equaling 10% of the understated amount is imposed. The same penalty applies if the understate ment results from a change of a tax point by the tax authorities. If the understated tax amounts to 5% to 20% of the reported tax, a penalty equaling 25% of the understated amount applies. In any other case, a penalty equaling 50% of the understated amount is imposed. No penalty is imposed if a taxpayer voluntarily files an adjusted tax return before an order on the tax offense or on the conducting of a tax inspection is issued.
Dividends. A dividend withholding tax is imposed on dividends paid by Georgian enterprises to individuals, not-for-profit compa nies and foreign legal entities. However, dividends paid to Georgian legal entities are not subject to withholding tax. The current dividend withholding tax rate is 5%.
The following types of dividends are not subject to withholding tax:
• Dividends paid by International Companies
• Dividends paid by Free Industrial Zone Companies
• Dividends paid by Agricultural Cooperatives to their members until 1 January 2023
• Dividends paid by an Investment Fund to a natural person or nonresident enterprise
Interest. An interest withholding tax is imposed on interest pay ments made by permanent establishments of nonresidents or residents or on their behalf to individuals, organizations or non residents without a permanent establishment in Georgia.
The current interest withholding tax rate is 5%.
The following types of interest payments are not subject to with holding tax:
• Interest paid by financial institutions licensed according to the Georgian law
• Interest paid by Free Industrial Zone Companies
• Interest paid on bonds issued by Georgian entities and listed on recognized foreign stock exchanges
Foreign tax relief. Foreign income tax paid on income generated from foreign sources may be credited against Georgian tax imposed on the same income, limited to the amount of such Georgian tax (that is, up to the amount of corporate income tax that would have been payable on such income in Georgia). To credit foreign tax paid abroad, payment evidence should be pro vided to the GTA.
C. Determination of taxable income
General. Until 1 January 2023, the tax base of commercial banks, credit unions, insurance companies, microfinance organizations and pawnshops equals the difference between the gross taxable income and the amount of deductions stipulated under the TCG. Consequently, the rules provided below in this section apply only to these entities. These entities will be taxed in accordance with the new system (that is, on distribution of profit), effective from 1 January 2023.
Taxable income of entities mentioned above is computed on the basis of International Financial Reporting Standards, modified by certain tax adjustments. It includes the following:
• Trading income
• Capital gains
• Income from financial activities
• Assets received free of charge
• Works and services
• Other items of income
Income received in foreign currency is converted into Georgian lari (GEL) at the daily exchange rate determined by the NBG for the date of receipt of the income.
Commercial banks, credit unions, insurance companies, microfi nance organizations and pawnshops may deduct from gross in come all documented expenses contributing to the generation of such income. However, certain expenses are nondeductible or partially deductible for tax purposes.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax Rate (%)
Value-added tax (VAT); imposed on goods and services supplied in Georgia and on imported goods; reverse-charge VAT is imposed on works and services carried out in Georgia by nonresident entities 18
Property tax; on the average annual net book value of fixed assets 1
Property tax for leasing companies on leased assets 0.6
Georgia also imposes import and excise taxes.
E. Miscellaneous matters
Foreign-exchange controls. The Georgian currency is the lari (GEL). The lari is a non-convertible currency outside Georgia. Enterprises may buy or sell foreign currencies through autho rized banks or foreign-exchange offices in Georgia.
Georgia does not impose restrictive currency-control regulations. Enterprises may open bank accounts abroad without any restric tion if they declare such accounts (other than deposit accounts) with the GTA within five working days after opening such accounts. In general, all transactions performed in Georgia must be conducted in lari. Transactions with nonresident entities can be conducted in other currencies.
Transfer pricing. Under the transfer-pricing (TP) rules set by the TCG, the arm’s-length principle applies to transactions carried out by taxpayers with related parties. The TP rules generally apply to cross-border transactions between related parties. These rules may also apply to transactions between a Georgian resident entity and an unrelated foreign entity that is a resident of a low-tax jurisdic tion and transactions between a Georgian company and its perma nent establishment.
The generally accepted transfer-pricing methods include the fol lowing:
• Comparable uncontrolled price method
• Resale price method
• Cost-plus method
• Net profit margin method
• Profit split method
The Minister of Finance of Georgia is authorized to provide detailed descriptions of TP methods, their application rules and other procedural rules.
In 2013, the Minister of Finance of Georgia enforced the Instruction “On Pricing International Controlled Transactions,” which is in accordance with the TCG provisions. The Instruction covers the following items:
• Scope of transactions subject to Georgian transfer-pricing rules
• Acceptable transfer-pricing methods
• Comparability criteria
• Information sources
It also outlines required actions for companies doing business in Georgia.
Thin capitalization. The thin-capitalization rules were abolished, effective from 1 January 2017.
F. Treaty withholding tax rates
Georgia has entered into tax treaties with 57 jurisdictions. The table below lists the withholding tax rates under these treaties. In general, if the withholding tax rate provided in a treaty exceeds the rate provided by the TCG, the latter rate applies.
Dividends Interest Royalties
% % %
Armenia 5/10 (a) 10 5
Austria 0/5/10 (b) 0 0
Azerbaijan 10 10 10 Bahrain 0 0 0 Belarus 5/10 (c) 5 5
Belgium 5/15 (c) 0/10 (d) 5/10 (e)
Bulgaria 10 10 10 China Mainland
0/5/10 (b) 10 5 Croatia 5 5 5 Cyprus 0 0 0 Czech Republic 5/10 (f) 0/8 (g) 0/5/10 (h) Denmark 0/5/10 (i) 0 0
Egypt 10 10 10 Estonia 0 0 0 Finland 0/5/10 (j) 0 0
France 0/5/10 (k) 0 0 Germany 0/5/10 (l) 0 0
Greece 8 8 5
Hong Kong SAR 5 5 5
Hungary 0/5 (u) 0 0
Iceland 5/10 (n) 5 5
India 10 10 10 Iran 5/10 (a) 10 5 Ireland 0/5/10 (j) 0 0
Israel 0/5 (w) 0/5 (y) 0
Italy 5/10 (f) 0 0
Japan 5/10 (z) 5 0 Kazakhstan 15 10 10 Korea (South) 5/10 (v) 10 10 Kuwait 0/5 (x) 0 10
Latvia 5/10 (v) 5 5
Liechtenstein 0 0 0
Lithuania 5/15 (o) 10 10 Luxembourg 0/5/10 (p) 0 0
Malta 0 0 0
Moldova 5 5 5
Netherlands 0/5/15 (q) 0 0
Norway 5/10 (v) 0 0
Poland 10 10 10
Portugal 5/10 (f) 10 5
Dividends Interest Royalties
Qatar
Romania
San Marino
Saudi Arabia
Serbia 5/10 (f)
Slovak Republic
Slovenia
Spain 0/10 (r)
Sweden 0/10 (aa)
Switzerland
Turkey 10
5/8 (m)
10
Turkmenistan 10 10 10
Ukraine 5/10 (a) 10 10
United Arab Emirates
United Kingdom 0/15 (s)
Uzbekistan 5/15 (t) 10 10
Non-treaty jurisdictions 5 5 5
(a) The 5% rate applies if the actual recipient of the dividends is a company (other than a partnership) that holds directly at least a 25% share in the capi tal of the payer of the dividends. The 10% rate applies in all other cases.
(b) The 0% rate applies if the beneficial owner of the dividends is a company that holds directly or indirectly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR2 million (or the equivalent amount in Georgian lari). The 5% rate applies if the beneficial owner is a company that holds directly or indirectly at least 10% of the capi tal of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in Georgian lari). The 10% rate ap plies in all other cases.
(c) The 5% rate applies if the beneficial owner of the dividends is a company that holds at least 25% of the capital of the payer of the dividends. The 15% rate applies in all other cases.
(d) The 0% rate applies if the recipient is the beneficial owner of interest on a commercial debt-claim, including a debt-claim represented by commercial paper, resulting from deferred payments for goods, merchandise or services supplied by an enterprise or if the recipient is the beneficial owner of interest on a loan of any nature that is not represented by a bearer instrument and that is granted by a banking enterprise. The 10% rate applies in all other cases.
(e) The 5% rate applies if the beneficial owner of the royalties is a company. The 10% rate applies in all other cases.
(f) The 5% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 25% of the capital of the payer of the dividends. The 10% rate applies in all other cases.
(g) The 0% rate applies if the recipient is the beneficial owner of interest on credit sales of industrial, commercial or scientific equipment. The 8% rate applies in all other cases.
(h) The 0% rate applies if the recipient is the beneficial owner of royalties paid for the use of, or the right to use, copyrights of literary, artistic or scientific works, except for computer software and including cinematographic films, and films or tapes for television or radio broadcasting. The 5% rate applies if the recipient is the beneficial owner of royalties paid for the use of, or the right to use, industrial, commercial or scientific equipment. The 10% rate applies if the recipient is the beneficial owner of royalties paid for the use of, or the right to use, patents, trademarks, designs or models, planes, secret formulas or processes, computer software or information concerning indus trial, commercial or scientific experience.
(i) The 0% rate applies if either of the following circumstances exists:
• The actual recipient of the dividends is a company that holds directly or indirectly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR2 million (or the equivalent amount in Danish krone or Georgian lari).
• The beneficial owner of the dividends is the other contracting state or the central bank of that other state, any national agency or any other agency (including a financial institution) owned or controlled by the government of the other contracting state.
The 5% rate applies if the actual recipient is a company that holds directly or indirectly at least 10% of the capital of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in Danish krone or Georgian lari). The 10% rate applies in all other cases.
(j) The 0% rate applies if the actual recipient of the dividends is a company (other than a partnership) that holds directly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR2 mil lion (or the equivalent amount in Georgian lari). The 5% rate applies if the actual recipient is a company (other than a partnership) that holds directly at least 10% of the capital of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in Georgian lari). The 10% rate applies in all other cases.
(k) The 0% rate applies if the actual recipient of the dividends is a company that holds directly or indirectly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR3 million (or the equivalent amount in Georgian lari). The 5% rate applies if the actual recipi ent is a company that holds directly or indirectly at least 10% of the capital of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in Georgian lari). The 10% rate ap plies in all other cases.
(l) The 0% rate applies if the actual recipient of the dividends is a company (other than a partnership) that holds directly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR3 mil lion (or the equivalent amount in any currency). The 5% rate applies if the actual recipient is a company (other than a partnership) that holds directly at least 10% of the capital of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in any currency). The 10% rate applies in all other cases.
(m) The 5% rate applies if the beneficial owner of the royalties is a resident of the other contracting state and receives royalties for the use of, or the right to use, industrial, commercial or scientific equipment. The 8% rate applies in all other cases.
(n) The 5% rate applies if the beneficial owner is a company (other than a part nership) that holds directly at least 25% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(o) The 5% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 25% of the capital of the payer of the dividends and that has invested in the payer at least EUR75,000. The 15% rate applies in all other cases.
(p) The 0% rate applies if the actual recipient of the dividends is a company that holds directly or indirectly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than EUR2 million (or the equivalent amount in Georgian lari). The 5% rate applies if the actual recipi ent is a company that holds directly or indirectly at least 10% of the capital of the payer of the dividends and that has invested in the payer more than EUR100,000 (or the equivalent amount in Georgian lari). The 10% rate applies in all other cases.
(q) The 0% rate applies if the beneficial owner of the dividends is a company that holds directly or indirectly at least 50% of the capital of the payer of the dividends and that has invested in the payer more than USD2 million (or the equivalent amount in euros or Georgian lari). The 5% rate applies if the recipient is a company that holds at least 10% of the capital of the payer of the dividends. The 15% rate applies in all other cases.
(r) The 0% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(s) In general, the 0% rate applies if the beneficial owner of the dividends is a resident of the other contracting state. However, if the beneficial owner of the dividends is a pension scheme and if dividends are paid out of income derived directly or indirectly from immovable property within the meaning of Article 6 of the treaty by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempt from tax, the 15% rate applies.
(t) The 5% rate applies if the actual recipient of the dividends is a company (other than a partnership) that holds directly at least 25% of the capital of the payer of the dividends. The 15% rate applies in all other cases.
(u) The 0% rate applies if the beneficial owner of the dividends is a company (other than a partnership that is not liable to tax) that has held directly at least 25% of the capital of the company paying the dividends for an uninterrupted period of at least 12 months before the decision to distribute the dividends. The 5% rate applies in all other cases.
(v) The 5% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends. The 10% rate applies in all other cases.
(w) The 0% rate applies if the beneficial owner of the dividends is any of the following:
• A company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends
• The other contracting state or the central bank of the other contracting state
• A pension fund or other similar institution providing pension schemes in which individuals may participate to secure retirement benefits if such pen sion fund or other similar institution is established and recognized for tax purposes in accordance with the laws of the other state The 5% rate applies in all other cases.
(x) The 0% rate applies if the beneficial owner of the dividends is a company that has invested in the payer more than USD3 million (or the equivalent amount in Georgian lari). The 5% rate applies in all other cases.
(y) The 0% rate applies to pension funds and recipients of interest on corporate bonds traded on a stock exchange in the other state and issued by a company that is a resident of that state. The 5% rate applies in all other cases.
(z) The 5% rate applies if the beneficial owner of the dividends is a resident of the other contracting state. The 10% rate applies if dividends are deductible in computing the taxable income of the company paying the dividends.
(aa) The 0% rate applies if the beneficial owner of the dividends is a company (or partnership) that holds at least 10% of the capital or the voting power of the company paying the dividends. The 10% rate applies in all other cases.