Bank of Georgia PLC on Wednesday noted an amendment to corporate taxation in Georgia, starting in January.

The Tbilisi, Georgia-based lender said the corporate tax rate in the country will be increased to 20% from 15%. Bank of Georgia highlighted that it had anticipated that corporate tax on retained earnings would be scrapped from 2023 and for the existing 15% rate to remain only on distributed earnings.

Instead, the corporate tax rate on both retained and distributed earnings will be increased from 2023 to 20%. However, the dividend tax rate of 5% will be scrapped for payouts of 2023 profits and beyond.

‘In addition, with effect from 2023, taxable interest income and deductible expected credit losses will be defined per IFRS [international accounting rules], instead of local National Bank of Georgia regulations,’ Bank of Georgia said.

It added: ‘The re-measurement of deferred taxes is estimated, based on the September 2022 balance sheet, to result in a ₾80 million to 90 million [£24.9 million to £28.0 million] one-off deferred income tax expense that will be recognised in the group’s fourth quarter and full year 2022 results. This impact will be finalised following the completion of the year-end 2022 accounts.’

The bank expects an effective tax rate of 14.5% to 16% in 2023 for itself. In April, it quoted an average tax rate of 15% for 2021, the same as the two years before.

Bank of Georgia shares were 1.6% higher at 2,605.00 pence each in London on Wednesday afternoon.

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