Georgia tax guide · Reviewed July 2026
Georgia’s 1% tax,
without the shortcuts.
Eligible Individual Entrepreneurs with Small Business Status can pay 1% on qualifying taxable income. It is attractive—but not automatic, universal or a substitute for VAT and immigration checks.
Correct status.
Eligible activity.
Monthly compliance.
The quick answer
Yes—if all parts of the regime fit.
Registering an IE is only step one. You must separately receive Small Business Status, earn income within the regime and comply every month.
The standard rate is 1%. If gross economic-activity income exceeds 500,000 GEL, the rate becomes 3% from the beginning of that month through year-end. The usual declaration and payment deadline is the 15th of the following month.
Eligibility framework
Five checks before you call it “1%”.
A good setup begins with the facts: what you do, where you perform it, who pays you and how much you expect to bill.
Register as an entrepreneur
The regime is for an entrepreneur natural person—normally an Individual Entrepreneur—not an LLC or an unregistered freelancer.
Obtain Small Business Status
IE registration alone does not activate 1%. The Revenue Service must grant Small Business Status separately.
Check the activity
The Government can exclude activities. Your real work matters more than the label used on an application.
Classify the income
The 1% base is taxable Small Business income. Salary, excluded income and source questions need separate treatment.
Keep filing monthly
The declaration and payment are generally due by the 15th of the following month.
The most misunderstood point
Foreign customer does not automatically mean foreign-source income.
Article 90 ties the SBS taxable base to Georgian-source income, excluding salary and certain income outside the special regime. Source can depend on service type, where it is performed, the contractual relationship and specific statutory rules.
- A USD or EUR payment does not decide the source.
- An overseas bank account does not decide the source.
- A foreign client’s address does not decide the source.
- “Digital nomad” is not a tax exemption.
Practical rule: document the service, performance location, customer and payment trail; obtain tailored advice where the amounts or cross-border facts are material.
When turnover grows
500,000 GEL changes the rate before it changes the status.
Passing the annual threshold generally moves the SBS rate to 3% from the start of the month in which it is exceeded through year-end. It is not merely 3% on the excess.
If gross income exceeds 500,000 GEL in each of two calendar years, Small Business Status may be revoked from the following year under the Code’s rule.
A separate tax track
1% does not make VAT disappear.
That threshold can trigger mandatory VAT registration, generally with an application due within two business days after it is exceeded. Place-of-supply, exemptions and cross-border service rules affect what is VAT-taxable, so total bank receipts and VAT turnover are not always the same.
Monitor SBS turnover and VAT turnover separately from day one.
Worked situations
Same headline rate, different analysis.
Check the activity, contract and Georgian-source treatment; a foreign client or bank account does not decide the answer alone.
Turnover may enter the SBS base, but VAT, invoicing, cash-register and product rules remain separate.
The relationship and substance may create employment or source-classification issues despite an IE invoice.
The 3% rate generally applies from the beginning of September through 31 December—not only to the excess.
Monthly routine
Small business still needs records.
- Close the monthReconcile invoices, bank receipts, cash and payment channels.
- Classify incomeSeparate SBS-taxable income from salary, excluded income and items needing analysis.
- Check thresholdsTrack 500,000 GEL annual income and the separate rolling VAT test.
- Declare and paySubmit through RS.ge and pay by the applicable deadline, generally the 15th.
- Retain evidenceKeep contracts, invoices, statements, source documents and prescribed records.
Tax registration is not permission to work.
Georgia’s labour-migration framework now regulates entrepreneurial activity by many self-employed foreign nationals. IE registration and SBS do not settle the right-to-work or residence position. Exemptions and transitional rules may apply.
Review the work-permit guidance →Plain-English answers
Questions people ask after seeing “1%”.
Is Georgia’s 1% tax available to foreigners?+
Foreign nationality does not by itself prevent an entrepreneur natural person from receiving Small Business Status. Registration, activity, income and—since 2026—work-authorization or exemption questions still need checking.
Is 1% calculated on profit?+
Generally no. The headline SBS rate applies to taxable Small Business income within the regime, commonly described as turnover, rather than accounting profit after ordinary expenses.
Does a foreign client make the income tax-free?+
Not automatically. Client location, currency and bank-account country are not a complete source analysis. Where and how services are performed and statutory sourcing rules matter.
Does 500,000 GEL immediately cancel the status?+
No. The rate generally becomes 3% from the beginning of the threshold month through year-end. Status may be revoked after exceeding 500,000 GEL in each of two calendar years, subject to the Code’s timing rule.
Does the 1% regime remove VAT?+
No. Mandatory VAT registration can arise after VAT-taxable transactions exceed 100,000 GEL in any 12 consecutive calendar months; place-of-supply and exemption rules affect what counts.
Can I forget about months with no income?+
Do not assume that. Confirm the filing position for every month, retain source documents and keep the prescribed special records.
Set it up in Tbilisi
IE + Small Business Status,
complete local package.
Activity screening, IE registration, SBS application, tax-portal orientation and a 12-month Tbilisi legal address.
550 GEL professional service + 75 GEL authority costs + 350 GEL legal address.
Ask for the onboarding list ↗See the complete offer →Last reviewed 16 July 2026. General information, not individualized tax, legal or immigration advice. Check the current Georgian text and your facts before relying on a conclusion.