Ad monetisation suits the Georgian IE about as well as any activity can. The income is a service fee paid by a large foreign company, there is essentially no cost of goods, and the payments are regular and fully traceable.

Does this describe you?

You earn from YouTube ads, AdSense on your website, or a similar ad network. Payments arrive monthly based on impressions and views. You may also have sponsorships, channel memberships or affiliate income alongside the ad revenue.

Why the 1% rate applies

An IE with Small Business Status pays 1% on turnover up to 500,000 GEL a year. Turnover is what the network actually pays you. Because ad income carries essentially no cost of goods, a turnover tax here behaves almost like a tax on profit — which is why creators tend to do well under this regime compared with one that taxes profit at a much higher rate.

The B2B point that matters most

Your counterparty is Google — a foreign company, not a private individual. That puts you squarely in B2B territory: under standard place-of-supply rules the supply is treated as taking place where your customer is, outside Georgia. Two consequences:

• No Georgian VAT on your ad revenue.
• It is excluded from the 100,000 GEL VAT-registration threshold — so a channel that grows well does not create a VAT registration obligation from that income.

Sponsorships and other income streams

Most creators do not earn from ads alone. Where a brand or agency pays you for a sponsored integration, that is also a foreign company paying for a service — the same favourable B2B treatment applies. Affiliate commissions paid by a company work the same way.

The exception is anything you sell directly to your viewers — merch, courses, paid communities. Those are sales to private individuals, which is B2C and analysed differently, and such sales can count toward the VAT threshold. If you are building a product for your audience, map that side separately from the ad revenue.

What to watch

• Selling merch or courses to viewers — B2C income is analysed differently and can count toward the VAT threshold.
• Payouts to a personal account — keep business income in the business account so turnover is traceable.
• The 500,000 GEL ceiling — worth planning for once a channel scales.

Frequently Asked Questions

Do I pay Georgian VAT on AdSense income?

No. Google is a foreign company, so under B2B place-of-supply rules the revenue is outside Georgian VAT and excluded from the 100,000 GEL registration threshold.

How are sponsorship deals treated?

A sponsorship paid by a brand or agency is a service supplied to a company, so it receives the same treatment as ad revenue — outside Georgian VAT, with the 1% turnover tax applying.

Is ad revenue eligible for the 1% status?

Ad monetisation is generally a normal activity for the regime, but some activities are excluded from small-business status — worth confirming your exact case before registering.