This is the single question IT professionals ask us most often, usually phrased exactly that way. The short answer is that a B2B contract with a foreign company is the most favourable arrangement available under the Georgian small-business regime — but it is worth understanding why, because the benefit depends on facts you control.

What “B2B” actually means here

B2B simply means your customer is a business — a company, agency or other legal entity — rather than a private individual consumer. It is not a special contract type you have to request; it is a description of who is on the other side of the invoice. If you sign with a US LLC, a German GmbH or a Cyprus company, you are in B2B. If you sell a course to individuals, you are not.

Why that makes VAT disappear

Georgia applies standard B2B place-of-supply rules to services. The supply is deemed to occur where the customer is established. If your customer is a company outside Georgia, the supply happens outside Georgia — so it is not within the scope of Georgian VAT at all. Two practical consequences:

• You do not charge Georgian VAT on those invoices.
• Those sales are excluded from the 100,000 GEL threshold that would otherwise force VAT registration.

That second point is the one people miss. It is not merely that VAT is zero — the revenue does not accumulate toward the registration trigger. You can invoice foreign companies well past 100,000 GEL without a VAT registration obligation arising from it.

And the 1% on top

Separately from VAT, an Individual Entrepreneur with Small Business Status pays 1% on turnover up to 500,000 GEL per year. Combine the two and the picture for an IT professional on a B2B contract is: 1% turnover tax, no VAT, and no VAT registration triggered by that revenue.

Keep the facts consistent

The treatment rests on your client genuinely being a foreign business, so keep the paperwork aligned: the contract in the company’s name, invoices issued to the company, and payments arriving from the company to your Georgian business account. If a reviewer ever looks, that consistency is what supports the position.

What to watch

• Mixing in consumer sales — selling apps, courses or subscriptions to private individuals is B2C and analysed differently.
• The 500,000 GEL ceiling — above it, small-business treatment stops applying to the excess.
• Excluded activities — a few activities cannot use small-business status; confirm yours before registering.

Frequently Asked Questions

I’m an IT professional on a B2B contract — do I pay VAT in Georgia?

No. Where your client is a foreign company, the supply is treated as taking place outside Georgia, so Georgian VAT does not apply — and that revenue is excluded from the 100,000 GEL VAT-registration threshold.

Does it matter which country my client is in?

What matters is that the client is a business established outside Georgia. Whether that is the US, the EU or elsewhere, the B2B place-of-supply logic is the same.

What if I invoice a private person instead?

That is B2C and follows a different analysis; such sales can count toward the VAT threshold. If you have a mix, it is worth reviewing the split before it grows.