Georgia offers a 1 % flat tax on income earned from Georgian sources for qualifying private individual entrepreneurs. The regime is designed for digital nomads and small‑business owners who can meet a few administrative requirements.
How to qualify
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Register as a private individual entrepreneur
- Visit the State Registry of Georgia (TBC) with a passport or other ID.
- Pay the registration fee of 20 GEL (≈ US $6).
- Provide a local address (ownership or written consent from the owner).
- The registration is typically completed within one working day.
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Become a taxpayer
- Register with the Revenue Service either in person, at a service centre, or online via the web portal.
- Submit the form to obtain “small business entrepreneur” status.
- The tax‑payer registration fee is another 20 GEL (≈ US $6).
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Activate the 1 % tax rate
- Once the certificate is issued, the reduced rate applies from the following month.
- Monthly tax returns must be filed by the 15th of the next month, and the 1 % tax is paid at the same time.
Income limits and escalation
- The 1 % rate applies while annual Georgian‑source income does not exceed ₾500,000 (≈ US $150,000).
- If income exceeds this threshold in a calendar year, the rate rises to 3 % for that year and the next year.
- After two consecutive years above the limit, the entrepreneur loses the 1 % status entirely.
Activities excluded from the regime
- Production of goods subject to excise taxes.
- Activities involving architectural, auditing, tax consulting, or legal services.
- Staffing or recruitment services.
- Any business that already pays taxes under the standard Georgian tax system.
Hiring and payroll advantages
- Employers may hire staff without withholding the standard 20 % payroll tax on salaries up to ₾6,000 per employee per year (≈ US $1,900).
- Contract workers who are themselves registered as private individual entrepreneurs can also benefit from the 1 % rate and pay their own taxes, relieving the employer of withholding obligations.
Practical considerations
- Residency: You do not need to be a Georgian tax resident; the status can be obtained directly after arrival.
- Language: The Revenue Service’s online portal offers an English interface, simplifying registration and filing for non‑Georgian speakers.
- Timeline: Both registration steps (registry and tax‑payer) can be completed within a few days, after which the reduced tax rate becomes effective the following month.
By meeting the registration requirements, staying within the income ceiling, and avoiding the excluded business activities, digital nomads and small entrepreneurs can legally reduce their Georgian tax burden to 1 % of qualifying income.
