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TBC Bank Group PLC on Wednesday predicted a one-off earnings hit as Georgia enacts changes to its corporate tax model.
Georgia will no longer shift to an Estonian model, which would have meant banks would be exempt from paying corporate tax on retained earnings. They would have only needed a payment of 15% of distributed earnings under the Estonian system.
TBC Bank said the existing corporate tax rate for banks will be increased to 20% from 15% from 2023. Dividends, however, will no longer be subject to a 5% tax. All-in-all, the financial services provider in Georgia said its effective tax rate will be around 14% to 16% in 2023.
It expects a hit of around ₾100 million to ₾110 million, roughly £30.6 million to £33.7 million. This will be booked in its fourth quarter and 2022 results.
By Eric Cunha, Alliance News news editor
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