If you are a freelancer, consultant, or solo founder moving to Georgia, you will quickly run into three numbers: 1%, 0%, and 20%. They are not tiers of one tax and they are not options for a company. They are three regimes for taxing the personal income of an individual — most often an Individual Entrepreneur (IE). Pick the right one and your tax bill can be almost nothing; pick wrong and you default to 20%.

One thing to clear up before we start: a Georgian LLC is taxed under a separate, Estonian-style corporate system at 15% on distributed profit. That is a different entity and a different tax. Nothing on this page is the corporate rate. If you want to understand how to legally optimise your Georgian tax position across both individual and company structures, that is a wider topic — here we stay strictly with personal regimes.

The three regimes in one sentence each

• Micro Business Status (0%): for a very small individual operator earning up to 30,000 GEL a year with no employees — pays no tax on that turnover.
• Small Business Status (1%): for an Individual Entrepreneur with turnover up to 500,000 GEL a year — pays 1% of turnover.
• Standard (20%): the default flat personal income tax for any individual or IE who holds no status.

All three sit on the individual, not on a company. An IE in Georgia is not a separate legal person — it is you, registered to do business. That is exactly why these regimes can apply to your freelance or trading income.

Micro Business Status — 0%

Micro Business Status (MBS) is the lightest regime Georgia offers. If your gross annual turnover stays at or below 30,000 GEL, you pay 0% on it. Record-keeping is minimal — you essentially track turnover and nothing more.

The trade-offs are real. You cannot employ anyone under micro status — it is built for a one-person operation. And from 2026 the exit rule has teeth: if you cross the 30,000 GEL ceiling, you have 15 calendar days to move up to Small Business Status. Miss that window and the standard 20% applies to all of your income, not just the part above the cap. Micro status suits early-stage freelancers and very small side operations; once you have real volume, you outgrow it fast.

Small Business Status — 1%

Small Business Status (SBS) is the regime most foreign freelancers and online entrepreneurs in Georgia actually use. As an IE with SBS you pay 1% of turnover up to 500,000 GEL per calendar year. If you exceed 500,000 GEL within the year, the portion above the cap is taxed at 3% rather than 1%.

There is a higher ceiling for one niche: agritourism activity gets a 500k-plus headroom up to a 700,000 GEL threshold. For everyone else, 500,000 GEL is the line.

A useful 2026 change: SBS now takes effect from the date you request it, not from the first day of the following month. That removes the dead waiting period that used to leave new arrivals taxed at 20% for the rest of the month. When you register an IE and apply for 1% small business status, the status can be live the same day.

Standard — 20%

The standard regime is a flat 20% personal income tax. It is what you pay as an individual or IE if you hold no status — and it is the penalty you fall back to if you lose one.

It is also unavoidable for certain kinds of income. Regardless of whether you hold micro or small business status, the following are always taxed at 20%: rental income, capital gains, interest, dividends, royalties, gifts, inheritance, and gambling winnings. Your 1% or 0% applies to your active business turnover — not to passive or investment income.

The three regimes side by side

Regime	Rate	Turnover cap	Employees	Excluded activities	Record-keeping
Micro Business	0%	30,000 GEL/yr	None allowed	Same exclusions as 1% apply	Minimal (turnover only)
Small Business	1% (3% on excess over cap)	500,000 GEL/yr (700,000 for agritourism)	Allowed	Several professional/licensed activities (see below)	Turnover ledger required
Standard	20%	No cap	Allowed	None — open to all	Full accounting

Who qualifies for what

In practice, most location-independent earners land on Small Business 1%: web developers, designers, marketers, consultants (outside the restricted fields below), e-commerce sellers, and traders all fit comfortably under the 500,000 GEL cap. Micro 0% makes sense only if your turnover is genuinely tiny and you have no plans to hire. The standard 20% is for those whose activity is excluded from the special regimes, who exceed the caps, or who simply never applied.

Note that your status here is separate from your residency. Becoming a Georgian tax resident is a related but distinct question — it governs where you are taxed, while these regimes govern how much.

Losing or upgrading status

Small Business Status is not automatically forfeited the first time you go over 500,000 GEL — the year’s excess is simply taxed at 3%. But if you exceed the cap in two consecutive years, the status is revoked from January 1 of the third year, and you move to standard accounting.

The micro-to-small jump is sharper. Cross 30,000 GEL and you have just 15 calendar days to switch to SBS, or 20% hits everything. And when your business genuinely outgrows the small-business model, the next step is usually a company — read what happens when you outgrow the 500,000 GEL small-business cap and how the move to an LLC works.

The activities that disqualify you from 1% and 0%

Some activities cannot use the special regimes at all and are taxed under the standard system. These include: legal and notarial services; medical practice; architecture; tax, audit, and accounting consulting; advisory services; currency exchange; financial intermediation; gambling; activities subject to excise tax; staffing/personnel supply; and any licensed or permit-based activity. If your core work falls into one of these, plan around the 20% baseline.

Frequently asked questions

Is the 1% rate on profit or on turnover?

On turnover. Small Business Status charges 1% of gross revenue up to 500,000 GEL — your costs do not reduce the base. That is why it is so attractive for high-margin service work.

Can I hire staff under Micro Business 0%?

No. Micro status is strictly for a single individual with no employees. If you need to hire, you cannot use the 0% regime — Small Business 1% allows employees.

What happens if I go over 500,000 GEL in one year?

The amount above 500,000 GEL is taxed at 3% instead of 1% for that year. You keep the status. Only if you exceed the cap two years in a row is the status revoked, from January 1 of the third year.

Does the 1% apply to my rental or dividend income too?

No. Rent, capital gains, interest, dividends, royalties, gifts, inheritance, and gambling winnings are always taxed at 20%, whatever status you hold. The special rates only cover active business turnover.

This article is general information, not tax or legal advice.