Georgia Small Business Status Tax Calculator (1%)
As of 2026, a registered Individual Entrepreneur with Small Business Status in Georgia pays 1% tax on gross turnover up to ₾500,000 a year (≈ USD 185,000); once cumulative income crosses that cap, the rate becomes 3% from the beginning of that month until year-end (art. 90(2)) — and the regime taxes revenue rather than profit, with consulting of any kind excluded by government decree.
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How the 1% regime actually works
Georgia’s small business regime is unusual in two ways. First, it is a turnover tax: 1% of what you invoice, with no deductions, no brackets and no annual reconciliation drama. For a freelancer with laptop-sized costs that is close to a pure win over Western profit-based systems — you trade deductibility you barely used for a rate twenty times lower. Second, it is administered almost entirely through a monthly rhythm: declare last month’s turnover on rs.ge by the 15th, pay 1%, done.
The cap has soft edges — but they work by month, not by euro. Crossing ₾500,000 in a calendar year does not end the regime; instead, from the beginning of the month in which your cumulative income crosses the cap, everything you earn through year-end is taxed at 3% while the earlier months stay at 1%. That makes timing matter: crossing in November costs far less than crossing in June on the same annual total. Do it two years in a row, and the status is revoked from 1 January of the third year, dropping you into the standard regime — 20% on profit, with the bookkeeping that implies. The calculator’s status line tracks where you stand.
The regime’s sharpest edge is the eligibility list, not the math. The exclusions in Decree No. 415 read like a freelancer directory — consulting of any kind is out, as are legal, medical, architectural and auditing work. The label on your activity matters: “software development” qualifies where “IT consulting” may not. The second sharp edge is residency: the 1% applies to your Georgian tax, and does nothing about the country that still considers you its tax resident.
Activities excluded from the status
Government Decree No. 415 — the list that catches people:
| Excluded activity |
|---|
| Consulting of any kind (including tax consulting) |
| Medical, architectural, legal or notarial, auditing services |
| Activities requiring a licence or permit |
| Foreign-exchange (currency) operations |
| Gambling and gaming business |
| Staffing / personnel provision |
| Production of excisable goods |
Frequently asked questions
Who can get Small Business Status?
Any natural person registered in Georgia as an Individual Entrepreneur whose activity is not on the prohibited list. Registration as an IE takes about a day at the Public Service Hall (you need a Georgian address for it), and the status itself is granted by the Revenue Service through the rs.ge portal. There is no citizenship requirement — but holding the status is a tax registration, not a visa or residence permit.
Is it really just 1%?
Yes — but of turnover, not profit. You pay 1% of every invoice regardless of your costs, file a short declaration each month by the 15th, and that is essentially the whole regime while you stay under ₾500,000 a year. The flip side of a turnover tax: a bad year with high costs still gets taxed on revenue, and nothing is deductible. Cross the cap and the rate switches to 3% from the start of that month through year-end (the earlier months keep their 1%), and two consecutive years over the cap revoke the status from 1 January.
Why can’t consultants use it?
Government Decree No. 415 excludes a list of activities from the status, and “consulting of any kind, including tax consulting” is explicitly on it — alongside legal, medical, architectural, auditing, currency operations, gambling and staffing. Software development, design, writing and similar delivery work generally qualifies; advisory work framed as consulting does not. If your activity code sits near the line, get written confirmation from the Revenue Service before building your finances on 1%.
Does paying 1% in Georgia free me from taxes at home?
No — and this is where most 1% plans fail. Georgia taxes the turnover of your Georgian IE; your home country taxes you based on its own residency rules. If you remain tax-resident elsewhere (183-day rules, centre-of-vital-interests tests), that country can still tax the same income, and some treat a foreign IE as a transparent or controlled entity. The regime works cleanly when you genuinely become Georgian tax-resident, and gets complicated fast when you do not. Get advice on the residency side — it matters more than the 1%.
What about VAT?
Small Business Status does not exempt you from VAT rules. Registration becomes mandatory once VAT-taxable transactions exceed ₾100,000 in any rolling 12 months. The saving grace for freelancers: B2B services supplied to businesses located abroad have their place of supply outside Georgia, so they are outside VAT scope and do not count toward the threshold. A Georgian IE invoicing only foreign companies typically never needs VAT registration; one selling to local clients may.
Assumptions & limits of this estimate
- Small Business Status holder (Individual Entrepreneur), amounts in GEL.
- Georgia’s funded pension is voluntary for the self-employed and not modeled.
- Home-country tax residency, treaties and banking are outside scope — and usually decide whether the plan works.
- Currency conversion uses whatever rate you apply; the official reference is nbg.gov.ge.
- Estimates for planning, not tax or immigration advice.
Data sources & verification
- Tax Code of Georgia (official English translation) — matsne.gov.ge, arts. 88–90 Last verified: 2026-07-20
- Georgia Revenue Service — Preferential tax regimes (small/micro business) Last verified: 2026-07-20