The taxpayer, who has not taxable income (profit) for the previous tax year, is not obliged to pay taxes for current recording year.

Taxable profit of an enterprise shall be taxed at the rate of 15%, with the exception of the profit received from the performance of oil and gas transactions, as a result of the implementation of “Existing Agreements” set forth in the “law of Georgia on Oil and Gas” that shall be taxed at the rate of 10% if these agreements are concluded prior to January 1, 1998.

Enterprises are obliged to make current tax payments of corporate income tax to the budget according to annual tax for a previous tax year, in the following amounts, within the following dates: a) not later than May 15 _ 25%; b) not later than July 15 _ 25%; c) not later than September 15 _25%; d) not later than December 15 _ 25%.

The grant received by organisation is exempted from corporate income tax.

A taxpayer is entitled to deduct bad debts derived from realization of goods and services, according to which receivable incomes were included in the gross income obtained from economic activity in the previous reporting periods.

The deduction of bad debts shall be allowed only in case if the arrears have been written off and reflected in a taxpayer’s accounting reports.

Herewith, the bad debt is a claim or its portion recognized by a taxpayer as a result of realization of goods and/or services or advanced payments within the abovementioned, the payment deadline of which is overdue and which has not been reimbursed until the end of the current tax year, furthermore one of the following documents is in place:

a) A court decision in force on the refusal to grant the claim;

b) A certificate from an enforcement authority on non or partial receipt of due amount by a creditor under the court decision as a result of the execution of enforcement order;

c) An court ruling entered into legal force on acceptance of an application on insolvency into proceedings in relation to a relevant person or the commencement of bankruptcy proceedings and/or rehabilitation proceedings, in case if the judge has not recognized the claim of such creditor;

d) A certificate from the registry of business and non-entrepreneurial (non-commercial) legal entities about the deregistration or decease.

 (Article 8 of Tax Code of Georgia) 

For tax purposes, gifting of property to an enterprise is deemed as supply; accordingly, received surplus income is added to gross income considering the market value of this property and is taxed with corporate income tax according to existing rules. When receiving property as a gift as soon as transfer of ownership is conducted, this property will be added to gross income considering the market value and will be taxed with corporate income tax according to existing rules. 

If an enterprise/organisation was established after the beginning of calendar year, but before December 1 of this year, the tax year for this enterprise/organisation will be the period from the establishing until the end of this year. Consequently, taxable period for LTD established in September is period from its establishing to the end of 2008 year and despite the fact that LTD has not conducted economic activities, it is obliged to submit tax return (zero tax return) on corporate income tax according to the tax period of 2008 year before April 1 of 2009.

 The following cases are exempted from corporate income tax:

• Profit received prior to January 1, 2017 by individual, employed in agricultural production, from primary supply of agricultural products made in Georgia that was carried out before industrial processing (change of commodity code), if gross income received from such supply during the calendar year does not exceed Gel 200.000;
• Profit received prior to January 1, 2017 by agricultural cooperative from primary supply of agricultural products produced in Georgia before industrial processing (change of commodity code);

Herewith, agricultural activity is activity envisaged by International Accounting Standard 41.

In addition, agricultural products are products that are derived from agricultural activities. Amending a commodity code as a result of biological transformation, also as a result of generating product from biological asset (removal of products or termination of biological asset’s life cycle) should not be considered as industrial processing (changing commodity code) of agricultural products. 

The amount transferred to charitable organization by an enterprise/individual entrepreneur, also market value of goods (except for real estate)/ services that were provided for free, reflected in gross income, shall be deducted from gross income, though it shall not exceed 10 percent of the amount remaining after the deductions from the gross income envisaged under the Tax Code of Georgia (without the deduction envisaged under the Article 117 of Tax Code of Georgia).  

 If expected taxable income (profit) of current tax year has been reduced at least by 50% compared to the taxable income (profit) of a previous tax year, and taxpayer has notified the tax authority about mentioned, not later than deadline for paying current tax liabilities, taxpayer has a right to reduce or not to pay altogether the current tax liabilities.

The losses incurred according to recording year is reflected in the cell 33 of corporate income tax return, named “the excess of deductions over gross income”, that equals the negative difference (losses) between data from cell 31 (gross income) and cell 30 (deductions).

A partnership and other similar establishment shall pay corporate income tax by taking account of Article 143 of Tax Code of Georgia.