What is Small Business Status in Georgia?

It is a tax certificate from the Revenue Service that replaces the default 20% income tax with a flat 1% on gross turnover for qualified Individual Entrepreneurs. Because tax is levied on turnover, you do not need to track business expenses for income tax. Our fee is €150.

Which activities qualify for the 1% tax?

IT and software, marketing and copywriting, and design typically qualify. Consulting and advisory work needs a case-by-case check. Financial services, regulated professions such as legal, audit and specialized medical practice, gambling and manufacturing of excisable goods are excluded, and operating an excluded activity can trigger retroactive 20% taxation.

When does the 1% rate start and how do I pay it?

Since March 2026, the status takes effect on the day the application is submitted to the Revenue Service. You then file an electronic declaration and pay the 1% by the 15th of every following month, including a zero declaration in months with no income.

What if I earn more than 500,000 GEL?

Turnover above 500,000 GEL in the calendar year is taxed at 3% rather than cancelling your status. Separately, you must register for VAT once taxable turnover in Georgia passes 100,000 GEL in any rolling 12 months.

Can my Small Business Status be revoked?

Yes. If your turnover exceeds 500,000 GEL in two consecutive calendar years, the status is cancelled from 1 January of the following year. You can also cancel it voluntarily. After a cancellation you can reapply only from the next tax year. Missing a monthly declaration is fined, so we remind you of every deadline.

Georgia 1% Small Business Tax Status for Freelancers

1% Tax Registration for Freelancers & Digital Nomads - Small Business Status (SBS)

Pay just 1% tax on your freelance or remote income - legally. Georgia's Small Business Status (SBS) is the official tax program for digital nomads, freelancers, and remote workers earning up to 500,000 GEL (~$180,000 USD) per year. One of the lowest flat tax rates in the world.

Understanding Small Business Status in Georgia

Small Business Status (SBS) is a powerful legislative tax certificate granted by the Revenue Service of Georgia to qualified Individual Entrepreneurs. It transforms your legal tax obligation, replacing the baseline default 20% personal income tax with a flat, predictable 1% tax rate calculated strictly on your gross turnover.

How the Georgia 1% Flat Tax Works for Freelancers and Remote Workers

This tax regime is ideal for digital nomads, freelancers, software developers, remote consultants, copywriters, designers, and any international service provider who wants a fully legal, low-tax base in Georgia. It is one of the most competitive flat tax rates available to foreign workers anywhere in the world.

Commanding Turnover Thresholds: Enjoy the 1% flat rate for annual revenues all the way up to 500,000 GEL (~$180,000+ USD).
Progressive Safety Valve: If your gross turnover exceeds 500,000 GEL during the calendar year, the revenue above that limit is taxed at a modest 3% rather than invalidating your status.
Zero Profit-Expense Tracking: Because tax is levied strictly on top-line gross receipts, you do not need to collect, defend, or track business cost receipts for income tax purposes.
Swift Regulatory Activation: The tax certificate is filed and linked directly to your active 9-digit corporate profile through the online Revenue Service platform.

Which Freelance Activities Qualify for Georgia's 1% Tax? Permitted vs. Excluded Sectors

While the 1% tax regime is highly flexible, Georgian tax law restricts specific economic activities from utilizing this status. Operating a forbidden activity can trigger an retroactive 20% tax restructuring.

Allowed & Optimized Sectors	Prohibited / Excluded Sectors
IT & Software Engineering: Web development, application coding, SaaS solutions, IT infrastructure maintenance.	Financial Services: Currency exchange operations, banking, brokerage, microfinance, crypto trading.
Marketing & Copywriting: SEO strategy, digital ad management, content production, creative consulting.	Regulated Professional Activities: Legal counsel, notary offices, auditing services, specialized medical practices.
Design & Remote Consulting: UI/UX design, architecture drafting, project management, business advisory panels.	Gambling & Heavy Industry: Licensing of casinos, organization of lotteries, manufacturing of excisable goods.

The Certificate Activation Timeline

Acquiring the Small Business Status requires passing through precise synchronization points with the Revenue Service of Georgia.

Step 1: Baseline IE Pre-conditions Check

We audit your active Individual Entrepreneur profile in the National Agency of Public Registry (NAPR) to confirm all data fields, physical addresses, and primary NACE code classifications match perfectly.

Step 2: Revenue Service Application Submission

We access your official RS portal to format and lodge the formal petition for Small Business Status, explicitly specifying your primary service vectors according to the National Classification of Economic Activities.

Step 3: Verification & Certificate Issuance

The Revenue Service reviews and issues your electronic Small Business Certificate. Since March 2026, the status takes effect on the day the application is submitted, no longer from the first day of the following month.

Critical Ongoing Compliance Rules

Maintaining your 1% status demands consistent adherence to monthly declarations and financial reporting boundaries:

Monthly Declarations Filing: You must submit an electronic tax declaration and transfer your 1% tax payment by the 15th of every following month (e.g., January's tax is due by February 15th).
The 100,000 GEL VAT Trigger: If your domestic or taxable revenue within Georgia surpasses 100,000 GEL in any rolling 12-month window, you must register for VAT. This is a separate framework that operates alongside your 1% status.
File Every Month, Even at Zero: Since March 2026, a missing monthly declaration no longer counts as a zero return. It is a tax offense subject to a fine, so file a zero declaration in quiet months or cancel the status if you stop working.