Taxes in Georgia for Individual Entrepreneurs
Updated: May 2026
Georgia’s liberal tax system is a major reason entrepreneurs register an individual entrepreneur (IE) here. This guide covers the taxes that actually apply to an IE — and the regime that keeps most of them very low.
The 1% Small Business Regime
With Small Business Status, an IE pays just 1% of turnover on annual turnover up to 500,000 GEL. That 1% replaces the 20% personal income tax an IE would otherwise pay on business income — it is not a separate “profit and dividend” tax.
Cross the 500,000 GEL line and the excess is taxed at 3% until year-end; stay over the limit for two years running and the status is withdrawn. The 1% switches on from the start of the month after approval. Turnover under 30,000 GEL can instead sit under Micro Business Status (0%), and a February 2025 change took construction work invoiced to Georgian companies out of the 1% rate.
| Threshold / regime | Tax |
|---|---|
| Micro Business (≤30,000 GEL turnover) | 0% |
| Small Business (≤500,000 GEL turnover) | 1% of turnover |
| Turnover above 500,000 GEL (same year) | 3% |
| Agro / wine-tourism annual cap | 700,000 GEL |
| VAT registration (any continuous 12 months) | at 100,000 GEL; rate 18% |
Income Tax Without Small Business Status
Drop Small Business Status and the maths changes: an IE is then taxed at 20% personal income tax, but on net profit (revenue minus allowable business costs), not on turnover. It is also not the company route, where distributed profit is taxed at 15%.
VAT and Foreign Clients
The standard VAT rate is 18%, yet a service sold to a business abroad usually carries no Georgian VAT at all. That is down to the place-of-supply rules (Tax Code Art. 162 / 162¹): the supply is deemed to happen at the client’s location, so it sits beyond Georgia’s VAT system rather than being a local exemption. Digital services billed to individuals abroad are normally treated the same way.
You are only obliged to register for VAT once your taxable (mostly Georgian-market) sales pass 100,000 GEL within any rolling 12-month window.
Property Tax
Property tax for individuals is not a flat 1%. It is progressive, based on the household’s total annual income: families earning under 40,000 GEL are exempt; 40,000–100,000 GEL pay 0.05%–0.2% of the property’s value; and 100,000 GEL or more pay 0.8%–1% (capped at 1%). The exact rate within each band is set by the local municipality.
Payroll, Pensions and Filing
If an IE employs staff, 20% personal income tax is withheld on salaries. The funded pension scheme adds 2% from the employee, 2% from the employer and 2% from the state for eligible employees; for a self-employed IE joining is voluntary, and foreign nationals without a permanent residence permit fall outside it.
An IE with Small Business Status files a monthly turnover declaration and pays the 1% by the 15th of the following month, plus an annual return by 1 April. You keep a turnover journal but are exempt from full (double-entry / IFRS) financial statements.
Work Permits from 2026
A change worth watching: under Law No. 862, Georgia is introducing a labour-migration permit for foreigners who work in the country. It applies from 1 March 2026, and foreigners already self-employed here must fall in line by 1 May 2026; the permit costs GEL 200, or GEL 400 on the fast track. The requirement targets foreigners working with the local Georgian market; an IE serving only clients abroad falls outside it, and it becomes relevant once you take on work for Georgian companies.
Other Advantages of Doing Business in Georgia
Beyond low taxes, Georgia offers:
- A predictable legal and tax environment with ongoing economic reform
- A strategic location between Europe and Asia
- Free Industrial Zones with extra incentives for export businesses
- 58 double-taxation treaties in force
- Fast registration with no minimum charter capital
Conclusion
For most individual entrepreneurs, Georgia’s 1% regime keeps taxes genuinely low — provided your activity qualifies and you keep up the simple monthly filings. We can confirm your eligibility and handle registration and ongoing compliance.
Not sure which taxes apply to you? Ask us.
See also: register an IE in Georgia, Georgia tax residency, small business in Georgia, business taxes in Georgia.