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Georgia: Guidance on tax treatment of capital contributions and capital reductions

Ruling No. 208 published July 3, 2026

August 7, 2026

The Ministry of Finance on July 3, 2026, published Ruling No. 208, clarifying that the tax-neutral treatment for asset contributions in exchange for 50% or more of a company's shares applies only to Georgian entities and that contributed assets retain their historical tax value. When the 50% threshold is not met, the contribution is treated as a supply valued at market price.

The ruling also confirms that distributions upon liquidation, share redemption, or capital reduction exceeding a shareholder's original capital contribution are subject to corporate income tax and dividend withholding tax, with an exemption from withholding tax for certain real estate gains when shares have been held for more than two years.
 

For more information, contact a KPMG tax professional in Georgia:

Mikheil Khvedelidze | mkhvedelidze@kpmg.com

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