REG - TBC Bank Group PLC - Changes to the taxation model in Georgia

TBC BankAnnouncement

28/12/2022 18:00

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RNS Number : 1249L  TBC Bank Group PLC  28 December 2022

Changes to the financial sector taxation model in Georgia

 

TBC Bank Group PLC ("TBC PLC") announces that today the amendment to the
current corporate taxation model in Georgia applicable to financial
institutions has been enacted, which will be applicable from 2023.

 

Under the new model, starting from 2023, the financial sector will no longer
switch to the Estonian tax model, which was expected to exempt banks from
paying corporate taxes on retained earnings and required only a payment of 15%
corporate tax rate on distributed earnings.

 

The model change will have an immediate impact on deferred tax asset and
deferred tax liability balances and a corresponding income tax effect,
attributable to previously recognised temporary differences between financial
and tax accounting balances arising from previous periods. The impact also
includes potential provisions for one-off tax charges, which are likely to be
required by the Georgia Tax Authorities as a one-off reimbursement for
interest income deductions applied under a previously enacted law. The total
potential one-off effect on the group's earnings is estimated to be GEL
100-110 million based on 30 September 2022 balance sheet and will be
recognised in the group's fourth quarter and full-year 2022 results. The
amount of the impact will be re-confirmed with the publication of the
full-year 2022 financial results.

 

Also, with effect from 2023, the existing corporate tax rate for banks will be
increased from 15% to 20%, while dividends will no longer be taxed with 5%
dividend tax. As a result of these changes, the group's effective tax rate is
expected to be around 14-16% in 2023.

 

For further enquiries, please contact:

Director of Investor Relations and International Media

Andrew Keeley

 

Or

 

Head of Investor Relations

Anna Romelashvili

ir@tbcbank.com.ge (mailto:ir@tbcbank.com.ge)

 

About TBC Bank Group PLC ("TBC PLC")

TBC Bank Group PLC ("TBC PLC") is a public limited company registered in
England and Wales. TBC PLC is the parent company of JSC TBC Bank ("TBC Bank")
and a group of companies that principally operate in Georgia in the financial
sector and other closely related fields. TBC PLC also recently expanded its
operations into Uzbekistan. TBC PLC is listed on the London Stock Exchange
under the symbol TBCG and is a constituent of FTSE 250 Index. It is also a
member of the FTSE4Good Index Series and the MSCI United Kingdom Small Cap
Index.

 

TBC Bank, together with its subsidiaries, is a leading universal banking group
in Georgia, with a total market share of 38.8% of customer loans and 40.0% of
customer deposits as of 30 September 2022, according to data published by the
National Bank of Georgia.

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