Corporate Income Tax Assessment and Ways Forward
Status: Complated
Project Milestones: Start date: 15.08.2022 End Date: 31.01.2023

The Estonian model of Corporate Income Taxation (CIT) that came into force on January 1, 2017, in Georgia is based on the distributed profit taxation regime, according to which retained corporate income is tax-free, and profit is taxed at 15% only when distributed. It freed up resources for investments, eased profit tax administration, and positively reflected on Georgia's ranking in the World Bank Doing Business "paying taxes" indicator.

The objective of this grant is to research the economic, fiscal, and other effects of the current CIT system implemented in Georgia and estimate the impact of capturing all business segments under this model. It also addresses the existing challenges with the current model and recommends ways to improve it.

The performed analysis will be shared and discussed with all respective stakeholders. A public-private dialogue event will be organized in Tbilisi to present and discuss the initial findings of the research with the Ministry of Finance of Georgia and other key stakeholders of the reform.