martes, 13 de septiembre de 2016

Georgia to move to distributed profit tax system

Beginning in 2017, the existing profit tax regime, under which companies are subject to tax on their annual taxable profits, will change to a system where tax will have to be paid only if corporate profits are distributed (or deemed distributed).

Following protracted negotiations and discussions, the Georgia parliament adopted, and the president signed into law, amendments and an addendum to the country’s tax code in May 2016, which will fundamentally reform the profit tax regime for Georgia companies and permanent establishments (PEs) of nonresident companies. The existing profit tax regime, under which companies are subject to tax on their annual taxable profits, will change to a system where tax will have to be paid only if corporate profits are distributed, similar to the system adopted by Estonia.

Georgia has been actively looking for ways to stimulate economic growth and attract more investment from foreign and local investors, and the government considered Estonia’s 16 years of experience with a different corporate tax system to be a model of one of the ways to work toward these goals.

The new rules will be effective as from 1 January 2017, but will not apply to commercial banks, credit unions, insurance organizations, microfinance organizations and pawnshops until 1 January 2019.

Source & more info: Deloitte

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