The 2026 tax guide
Taxes in Georgia: rates, the 1% status and tax residency — with every condition attached
Rates from the Tax Code, checked against our own filings: the 1% regime, territorial rules for personal income, profit tax that waits for distribution, 58 double-tax treaties. Read it next to your current tax bill; the contrast is the argument.
Verified 1 September 2026 against PwC Worldwide Tax Summaries (last reviewed 21 January 2026) and Revenue Service practice. General information, not tax advice — your case gets its own analysis.
Flat personal income tax
One rate, no brackets — and it applies to Georgian-source income only.
Small Business Status
On turnover up to ₾500,000/year for Individual Entrepreneurs. The headline act.
Corporate tax — on distribution only
The Estonian model: reinvested or retained profit is taxed at exactly 0%.
Dividends & interest
Withheld at source, and that's the end of the story. Also the rate for residential rent.
VAT
Registration becomes mandatory above ₾100,000 turnover in any 12 months. Exports zero-rated.
On most foreign-source income
Foreign dividends, interest, capital gains, rent — generally not taxed in Georgia, even for residents.
Chapter one
Your personal taxes: the territorial trick
Georgia keeps personal taxation almost rude in its simplicity: a flat 20% on income from Georgian sources. No progressive brackets, no municipal surcharges, no social security on top for foreigners without permanent residency.
The magic word is territorial. Even as a Georgian tax resident, your foreign-source income is generally exempt: dividends from your US broker, interest from a German bank, capital gains on foreign shares, rent from a flat in Vienna, a foreign pension. Georgia simply doesn't reach for it.
Now the nuance that separates honest advisors from brochures: work you perform while physically sitting in Georgia is Georgian-source income — even if your employer is in London and your clients pay to a foreign account. Where the money lands doesn't matter; where your chair stands does. Remote workers who ignore this are betting against the Tax Code.
That is exactly why the Individual Entrepreneur setup exists: it takes that same “Georgian-source” freelance income and taxes it at 1% instead of 20% — legally, with a status the Revenue Service itself grants. More in chapter three.
Chapter two
Becoming a tax resident (often a good idea)
You become a Georgian tax resident by spending 183 days or more in the country within any continuous 12-month period ending in the tax year. That's it — no forms to trigger it, no minimum stay per visit.
Residency is what unlocks treaty benefits: with a Georgian tax residency certificate you can invoke one of 58 double-tax treaties to stop your home country withholding what Georgia doesn't charge. For anyone leaving a high-tax system, the certificate is the paper that makes the move real.
Can't sit still for 183 days? The High Net Worth Individual route grants residency without presence — broadly, for those with substantial wealth or income and a qualifying connection to Georgia (assets here, a residence permit, or Georgian-source income). The thresholds are specific and the file must be built carefully; it's a service we deliberately quote only after reviewing your numbers.
Chapter three
The famous 1% — and its fine print
Register as an Individual Entrepreneur (one day, ~10 lari), obtain Small Business Status, and your business revenue is taxed at 1% of turnover — not profit, turnover — up to ₾500,000 (roughly $185,000) per year. Declarations are monthly, five minutes each, due by the 15th.
The fine print, in daylight where it belongs:
| Regime | Rate | Ceiling | The catch |
|---|---|---|---|
| Micro Business | 0% | < ₾30,000/yr | No employees allowed; annual declaration. |
| Small Business Status | 1% of turnover | ≤ ₾500,000/yr | 3% on the excess above ₾500k; status lost after two consecutive years over the cap; monthly declarations. |
| Standard IE | 20% of profit | — | Expenses deductible — sometimes this actually beats 1% of turnover. We do the math. |
Chapter four
Companies: the Estonian model
Since 2017 Georgia taxes companies the Estonian way: corporate income tax exists only at the moment profit leaves the company. Reinvest, hire, buy equipment, let cash sit — 0%. Distribute dividends — 15% CIT (computed on the grossed-up amount) plus 5% dividend withholding.
For a growing business this is oxygen: the state only takes its share when you take yours. Banks and lenders are the exception at 20%; everyone else compounds tax-free.
| What | Rate | Notes |
|---|---|---|
| CIT on retained/reinvested profit | 0% | The Estonian model's whole point. |
| CIT on distribution | 15% | Also on deemed distributions: non-business costs, free transfers. |
| Dividend withholding | 5% | Final tax for individuals — nothing further due. |
| VAT | 18% | Mandatory above ₾100,000 turnover in 12 months; exports zero-rated; reverse charge on imported services. |
| Payroll withholding | 20% | Employer withholds; no separate social tax. |
| Pension contributions | 2% + 2% | Employee + employer (+0–2% state). Not applied to foreigners without permanent residency. |
| Interest / royalty WHT | 5% | Higher rates apply to payments to blacklisted jurisdictions (15%). |
Chapter five
Special regimes for the ambitious
Three legal universes with their own physics. Sometimes spectacular, sometimes worse than a plain 1% IE — we model which one actually saves you money.
Virtual Zone
0% corporate tax on IT services delivered outside Georgia, 0% VAT on exports; dividends still 5%. For software companies with foreign clients. Applications are scrutinized — real substance in Georgia (people, premises, decisions) is expected, and we build the file accordingly.
International Company Status
5% corporate tax, 5% payroll tax, 0% on dividends, property tax exemption. For IT and maritime businesses with two-plus years of track record, earning ≥98% from permitted activities. The grown-up regime: heavier to obtain, glorious to hold.
Free Industrial Zones
0% corporate tax, 0% VAT, 0% property tax for licensed activities inside the zones (Poti, Kutaisi, Tbilisi). Built for manufacturing, processing and trading — with its own licensing economics that need honest modelling first.
Chapter six
Property, rent & the pleasant leftovers
Renting out a residential flat? A special regime taxes it at 5% of gross rent, no bookkeeping theatrics. Selling residential property held over two years: exempt entirely; under two years, the gain is taxed at 5%.
Annual property tax only exists for households earning over ₾40,000 a year — and even then runs at 0.05–1% depending on municipality and income. There is no transfer tax on purchase; registration costs lari, not percent.
Add the quiet luxuries: no inheritance tax between close relatives, no gift tax within family, no stamp duties on everyday life. Georgia's tax code is short because it mostly leaves you alone.
Cheat sheet
Which hat fits you?
| You are… | Best first look | Effective burden | Why |
|---|---|---|---|
| Freelancer / remote contractor | IE + Small Business Status | ~1% of turnover | Cheapest legal setup in Europe's neighbourhood; monthly 5-minute filings. |
| Consultant / lawyer / doctor | Standard IE or LLC | 20% of profit / 15%+5% on distribution | Excluded from the 1% list — anyone promising otherwise is selling you an audit. |
| Software company, foreign clients | Virtual Zone or ICS | 0–5% + 0–5% dividends | Purpose-built IT regimes — if substance and track record are real. |
| Trading / agency / e-commerce | LLC (Estonian model) | 0% until distribution | Reinvest tax-free; take dividends when it suits you at 15%+5%. |
| Investor / landlord | Personal ownership | 5% rent · 0% after 2 yrs on sale | Foreign portfolio income stays untaxed; local property regime is gentle. |
| Living on foreign dividends | Tax residency + certificate | ~0% in Georgia | Territorial system + 58 treaties; the certificate does the talking back home. |
Read next
Three guides nobody else bothered to write
Work permit for IEs — 2026
Which foreigners need one to work with Georgian residents, which do not with clients abroad, and how to tell the two apart from your own contracts.
DetailsWho is excluded from the 1% tax
The full list of activities that Small Business Status does not cover, grey zones such as IT consulting, and what is left for consultants.
DetailsWorking from Georgia for a foreign company
Why work done from Georgia is Georgian income even with a client abroad, what 183 days change, and what each structure actually costs.
DetailsThe next step
Does the 1% tax fit you — we'll check on a free assessment
A guide can't see your passport, your client list or your calendar. One call maps these rules onto your facts: whether your work clears the 1% exclusions, whether the 183-day residency line helps or hurts you, what year one costs. Free, and specific.