Georgia's 1% tax: famous, real, and full of fine print

The 1% small business regime is why so many freelancers register in Georgia. The exclusions are why some of them get reclassified to 20%. This checker runs your turnover through the real thresholds and flags the traps before they flag you.

Your situation

Expected annual turnover

GEL / year

Advisory workConsulting, legal, medical, audit, architecture or similar, excluded from the regime by decree.One client, directed like a jobA single client controlling your hours and work like an employer risks reclassification to 20% employment tax.Licensed activityWork requiring a state license or permit.

Verified 22 Aug 2026Revenue Service guidance · Decree No. 415

Assessment

The 1% regime fitsSoftware, design and similar service work for foreign clients is exactly what Small Business Status serves.

₾1,200total annual tax (1.0% of turnover)

₾1,200

at 1%, up to ₾500,000

$459

in dollars, per year

VAT registration applies. Turnover past ₾100,000 in any rolling twelve months requires VAT registration, a separate obligation from the 1% status. Services to foreign clients are typically zero-rated, but the registration duty stands.

Registration: individual entrepreneur at the Public Service Hall (roughly ₾26, next business day), then the free Small Business Status application, effective the day you apply since the March 2026 amendment. Monthly declaration by the 15th, zero-income months included.

Methodology and sources

Small Business Status taxes turnover, not profit: 1% up to ₾500,000 per year and 3% on the portion above it. One year over the threshold keeps the status; two consecutive years revoke it from 1 January of the third year. Advisory activities of any kind, licensed work and employment disguised as contracting are excluded. Since the March 2026 amendment the status is effective from the application date. VAT registration is a separate duty past ₾100,000 of turnover in any rolling twelve months.

Flat 20% PIT; small business 1%/3% regime · PwC Worldwide Tax Summaries, Georgia (reviewed Jan 2026)
Funded pension 2+2+2, coverage and no-cap rules · Law of Georgia on Funded Pension
Pension-before-tax ordering (0.784 net coefficient) · Georgian payroll practice, confirmed against accounting software documentation and worked payroll calculators
Small Business Status mechanics and prohibited activities · Government Decree No. 415; Revenue Service guidance
Small Business Status effective from the application date · Special tax regime amendments in force 7 Mar 2026
GEL/USD official rate · National Bank of Georgia