Marketplace selling can work well under the Georgian IE, but it deserves more care than a services business. Most articles about the 1% regime are written for freelancers supplying services — and goods follow different rules.

Does this describe you?

You sell physical products through Etsy, Amazon, eBay or your own store — handmade goods, private label, wholesale sourcing, or print-on-demand where a supplier fulfils each order. Payouts arrive from the marketplace rather than from individual buyers.

Why the 1% rate applies

An IE with Small Business Status pays 1% on turnover up to 500,000 GEL a year. For a seller, turnover is your sales revenue — and here is the first thing to plan around: it is turnover, not profit. If you buy goods for 60 and sell for 100, the 1% is charged on 100, not on your 40 margin. For low-margin, high-volume selling that arithmetic matters far more than it does for a service business with no cost of goods.

Where your goods sit changes the VAT answer

For services to a foreign company, the supply is outside Georgian VAT and excluded from the registration threshold. Goods do not work that way. With physical products, what matters is where the goods are located and where they move:

• Goods exported from Georgia to buyers abroad are treated as export, which carries its own VAT treatment and customs formalities.
• Goods that never enter Georgia — Amazon FBA stock in the US or EU, or a print-on-demand supplier shipping directly — raise the question of where the supply happens at all, and may create obligations in that country rather than in Georgia.

This is the single most important thing for a marketplace seller to get straight, and it is why copying a freelancer’s setup can mislead you. Many sellers also face marketplace-collected sales tax or VAT in the destination country, which is separate from anything Georgian.

What to watch

• Turnover, not margin — low-margin reselling reaches the 500,000 GEL ceiling on far less profit than a service business would.
• Stock location — FBA warehouses or dropship suppliers abroad can create obligations outside Georgia.
• Gross vs net payouts — marketplaces deduct fees before paying you; agree how turnover is measured before you file.
• Excluded activities — confirm your specific trade qualifies for small-business status before registering.

Frequently Asked Questions

Is the 1% charged on my profit or my sales?

On turnover — your sales revenue, not your margin. For reselling with a thin markup this is the most important number to model before you register.

My Amazon stock is in the US and never touches Georgia. Does that work?

It can, but it is not automatic. When goods never enter Georgia, the question of where the supply takes place — and whether obligations arise in the country where the stock sits — needs to be looked at for your specific setup.

Do the service B2B rules help me?

Not directly. The rule that puts services outside Georgian VAT when the client is a foreign company applies to services. Selling physical goods follows a different analysis based on where the goods are.