IE with small business status
1% of turnover up to 500,000 ₾; above the cap, 3% of the whole turnover
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Not available for excluded activities
In lari—
Effective rate—
You keep—
Calculator — 2026
Georgia tax calculator: 1% IE, 20% IE or LLC — which is cheaper
Enter your annual turnover and see the tax under all three regimes at once: 1% of turnover with small business status, 20% of profit on the general regime, and the Estonian-model LLC. It runs in your browser and sends nothing anywhere.
An illustration, not tax advice: headline 2026 rates, none of your specifics. Eligibility for the 1% status is something we check before you pay — at the free consultation.
Run your own numbers
Your figures — three regimes side by side
IE on the general regime
20% of profit (turnover minus expenses)
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Not available for excluded activities
In lari—
Effective rate—
You keep—
LLC, Estonian model
15% on distributed profit plus 5% on dividends
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Not available for excluded activities
In lari—
Effective rate—
You keep—
Excluded activities cannot take the 1% status — the IE is compared on the general regime, 20% of profit.
Turnover above 500,000 ₾. The rate becomes 3% and applies to the whole turnover from the start of the month in which the cap was exceeded until the end of the calendar year. Exceeding the cap in two calendar years ends the status; the second year is not modelled here.
Taxable turnover above 100,000 ₾ in 12 months means VAT registration is required, with two business days to apply. Services to foreign customers are treated as supplied outside Georgia and are not counted towards the threshold, so no VAT is added to the amounts above.
A salary you pay yourself from the LLC carries 20% personal income tax. It is not modelled here: we assume you take profit as dividends only.
| Regime | Tax | In lari | Effective rate on turnover | Left after tax |
|---|---|---|---|---|
| IE 1% (small business) | — | — | — | — |
| IE 20% (general regime) | — | — | — | — |
| LLC 15% + 5% | — | — | — | — |
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Illustrative only: headline 2026 rates, no VAT, salaries, special regimes or your home country. Eligibility for the 1% status and the choice of structure are checked before you pay — at the free consultation.
How it counts
The formulas, in words
No magic — four arithmetic steps at the rates in the Tax Code. Turnover is first converted to lari at the rate in the form; everything is then computed in lari and converted back to your currency.
- IE with small business status: 1% of turnover while it stays under 500,000 ₾ a year. Once the cap is exceeded the rate becomes 3% and applies to the whole turnover from the start of the month of the excess until the end of the calendar year, not merely to the part above the cap. Expenses are not deducted at all — the base is always turnover.
- IE on the general regime: profit = turnover minus the expense share; tax = 20% of profit.
- LLC: profit = turnover minus the expense share; the chosen share of that profit is distributed; corporate income tax = 15% of the distributed amount; dividend tax = 5% of what is left of it. Undistributed profit is not taxed.
- The effective rate is tax divided by turnover, which is what makes the three regimes directly comparable. Left after tax is turnover minus tax — not your net profit, since your own costs are not subtracted.
- The point of indifference is found numerically: the script doubles the turnover until the 1% tax exceeds the LLC tax, then narrows the interval by bisection.
One deliberate simplification. We take 15% of the distributed profit and 5% of the remainder, which gives 19.25% of turnover at full distribution and zero expenses. In practice Georgian corporate income tax is computed on a gross-up basis (15/85 of the amount actually paid out), so a filed return may differ slightly. For comparing regimes the difference is immaterial; for filing, do the arithmetic with an accountant. VAT is outside the calculation: services to foreign customers are treated as supplied outside Georgia, and the 100,000 ₾ registration threshold is shown as a flag.
Questions
Frequently asked about this calculator
Below 500,000 ₾ a year, almost always: 1% of turnover is less than the 19.25% of profit an LLC pays on full distribution, or the 20% of profit a general-regime IE pays. It stops winning in two cases — when your activity is excluded from the small business status, or when your documented expenses are so large that 20% of a small profit is less than 1% of a large turnover.
The rate becomes 3% and applies to the whole turnover from the start of the month in which the cap was exceeded until the end of the calendar year, not merely to the part above it. If the cap is exceeded in two calendar years, Small Business Status is withdrawn and the IE moves to the general regime at 20% of profit. The calculator does not model that second year — it only warns you.
Only documented business expenses: subcontractors, software, office rent, equipment, communications. They have no effect at all on an IE with small business status, where the base is always turnover. The field is capped at 80% to keep the result plausible.
No. Under the place-of-supply rules, services to foreign customers are treated as supplied outside Georgia: they are not taxable transactions and are not counted towards the 100,000 ₾ registration threshold. This is not a “zero rate on exports” but a position outside the scope of Georgian VAT. That is why no VAT is added to the amounts and the threshold is shown as a flag instead.
As a first orientation, quite a lot; as a basis for a decision, no. This is the headline 2026 rate card plus a simplified profit-tax model, with no home country, no salaries, no special regimes such as Virtual Zone, and no eligibility check for the 1% status. That is exactly what the free consultation covers — before any engagement.
How to proceed
Is the 1% status yours — we check before you pay
Half an hour and you know whether your work qualifies for the small business status, which structure is cheaper in your case, and what 183 days in the country change. If the honest answer is no, you hear it for free.