კონფერენცია

∘ Izolda Chiladze ∘
THE NEW MODEL OF PROFIT TAXATION AND THE ACCOUNTING ISSUES IN GEORGIA

Summary

The subject of the study is the new model of profit tax and its relevant accounting issues. From January 1, 2017, new regulations of profit taxation in Georgia have been launched, which is known by the name of the Estonian model. According to this model, the taxable object is the distributed profit.

According ro the author, reinvestment of profit by the indirect coercive enterprise can not bring real positive results, first of all, reinvestment of profits has not been banned yet, secondly, 20% of the profit tax rate is not so high that the owners will refuse dividends and thirdly, unfortunately, in Georgia, the culture of the necessity of payng taxes is low. Therefore, the following measures need to be taken:

For all types of enterprises to legalize the minimum percentage margin of profit (30%) for reinvestment;
First of all, from the annual profit of the enterprise, must be allocated the investment amount and the remaining amount will be issued on the dividends after the deduction of profit tax;
The profit tax rate is equal to the income tax rate (20%).

As a result of the implementation of these measures, a new model of profit tax will be improved, budget revenues will not be reduced, employment will increase and tax risks will be reduced in Georgia.

Ivane Javakhishvili Tbilisi State University Paata Gugushvili Institute of Economics International Scientific C O N F E R E N C E S "ECONOMY – XXI CENTURY"

E ISSN 2587 - 4691	∘ Izolda Chiladze ∘ THE NEW MODEL OF PROFIT TAXATION AND THE ACCOUNTING ISSUES IN GEORGIA Summary The subject of the study is the new model of profit tax and its relevant accounting issues. From January 1, 2017, new regulations of profit taxation in Georgia have been launched, which is known by the name of the Estonian model. According to this model, the taxable object is the distributed profit. According ro the author, reinvestment of profit by the indirect coercive enterprise can not bring real positive results, first of all, reinvestment of profits has not been banned yet, secondly, 20% of the profit tax rate is not so high that the owners will refuse dividends and thirdly, unfortunately, in Georgia, the culture of the necessity of payng taxes is low. Therefore, the following measures need to be taken: For all types of enterprises to legalize the minimum percentage margin of profit (30%) for reinvestment; First of all, from the annual profit of the enterprise, must be allocated the investment amount and the remaining amount will be issued on the dividends after the deduction of profit tax; The profit tax rate is equal to the income tax rate (20%). As a result of the implementation of these measures, a new model of profit tax will be improved, budget revenues will not be reduced, employment will increase and tax risks will be reduced in Georgia.