Start with your actual work and income
Eligible Georgian individual entrepreneurs providing qualifying technology services.
- 1% on turnover within the qualifying regime
- permitted activity and statutory prohibited-activity review
- GEL 500,000 annual gross-income threshold
- 3% applies from the beginning of the month in which the threshold is exceeded through the end of that calendar year
- exceeding the threshold in two consecutive calendar years triggers the separate status-revocation rule
Start with the real income and activity
Small Business Status can tax qualifying turnover at 1%, but it is not automatic and not universal. the Revenue Service application and certificate determine when the status applies; income received before the effective date is not automatically within the 1% regime; 3% applies from the beginning of the month in which the threshold is exceeded through the end of that calendar year.
Send a contract, sample invoice and a short explanation of where and how the work is performed. We use the real transaction—not a headline tax rate—to identify the registrations and rules that matter.
The 1% regime begins only when validly granted and applicable
Small Business Status is available to a qualifying entrepreneur natural person. Under the current procedure, the Revenue Service application and certificate determine when the status applies; income received before the effective date is not automatically within the 1% regime. The taxable base is qualifying Georgian-source income within the regime—not automatically every payment received worldwide.
- Confirm that the activity is permitted and not excluded.
- Analyse Georgian-source income and cross-border service facts.
- Keep the special records book and source documents.
- File the monthly return and pay by the 15th day of the following month.
Software and technical delivery can qualify; an IT label is not enough
Small Business Status is not reserved for IT, but many genuine technology services can fall within the regime when they are not prohibited and the income otherwise qualifies. Typical examples include software development, coding, testing, systems administration, database work, hosting, data processing, web development and technical maintenance.
- Describe the deliverable and daily work, not only the job title.
- Check the contract, invoice wording and registered economic activity against the real service.
- Separate software creation or technical delivery from general business, management or strategic advice.
- Review mixed engagements before applying one rate to the whole invoice.
The statutory exclusions must be checked before the 1% rate is used
Government Resolution No. 415 lists activities that prevent or can end Small Business Status. For technology professionals, the most common risk is treating advisory or consulting work as eligible simply because the client operates in IT.
- Activities requiring a licence or permit.
- Currency-exchange operations and gambling business.
- Medical, architectural, legal or notarial, audit and consulting activities, including tax consulting.
- Personnel-supply activities.
- Production of excisable goods and the related excluded category requiring significant investment.
Some receipts remain under the ordinary tax rules
Even when the person holds Small Business Status, not every receipt is taxed at 1%. Salary, dividends, interest, rent, royalties, gifts, certain capital gains and other income listed outside the special regime are treated separately.
- Do not combine business turnover with salary or investment income in one 1% calculation.
- Foreign-client payment does not by itself prove Georgian-source treatment or eligibility.
- VAT registration and place-of-supply rules remain separate from Small Business income tax.
- Keep contracts, invoices, bank records and monthly turnover records for the qualifying activity.
The 3% rule applies from the threshold-crossing month
If annual gross income exceeds GEL 500,000, 3% applies from the beginning of the month in which the threshold is exceeded through the end of that calendar year. It is not a 3% charge only on the excess above the threshold.
- exceeding the threshold in two consecutive calendar years triggers the separate status-revocation rule
- VAT registration and the place of supply are separate from Small Business income tax.
- Monitor turnover before the crossing month so the correct rate is used in the monthly return.
What to send us first
Send a practical picture of how money is earned and documented. We will identify the registrations, tax analysis and operating documents that should be prepared professionally.
Send us first
- Current contracts and a plain-language service description
- Sample invoices and recent bank payment records
- Customer countries and whether clients are businesses or consumers
- Existing Georgian IE/company and tax records
- Approximate annual turnover and planned hiring
We prepare or coordinate
- Analyse activity, income source, status and VAT position
- Recommend the appropriate IE or company structure
- Prepare or coordinate the agreed registrations
- Provide invoice, bookkeeping, filing and threshold guidance
Obtained or confirmed later
- Public Registry and Revenue Service confirmations
- Bank KYC documents requested by the chosen bank
- Monthly source documents and tax returns
- Treaty or residency certificates if they become relevant
How the work usually proceeds
The exact order depends on the service and your documents. We confirm the steps and responsibilities before professional work begins.
- 01
map the actual service and client flow
- 02
separate immigration, work and tax questions
- 03
select the individual or company structure
- 04
complete registrations in the correct order
- 05
operate with monthly records, filings and threshold monitoring
How this may look in a real case
A software developer crosses GEL 500,000 in September. The 3% rate applies from the beginning of September through year-end, not only to the excess above the threshold.
What can slow the process down
We check these points at the beginning and flag gaps before filing, so you can correct them while there is still time.
- Small Business or another rate is used before the status effective date is confirmed.
- Contracts, invoices and payments describe different services or counterparties.
- Foreign-client income is classified without a Georgian-source and VAT review.
- Turnover, VAT and filing deadlines are not monitored from the first transaction.
A clear recommendation and a managed Georgian process
We translate your real contracts, income and customer flow into a practical registration and compliance plan.
ITResidency.ge is operated by ASSIO LEX & ASSOCIATES LLC, the Georgian legal and business-services provider for the engagement.
- IE or company comparison
- Income-source and status analysis
- VAT and cross-border review
- Registration and accounting handover
Frequently asked questions
Does the 1% Small Business rate apply automatically after I register an IE?
No. Individual Entrepreneur registration and Small Business Status are separate. You must apply to the Revenue Service, check the confirmed effective date, carry out a permitted activity and report qualifying income correctly. Receipts before the status applies do not become 1% income merely because the application was filed later.
Which IT activities can qualify for Small Business Status in Georgia?
Genuine software and technical services can qualify when they are not prohibited and the income falls within the special regime. Common examples include software development, coding, testing, web development, database work, systems administration, hosting, data processing and technical maintenance. The contract and actual deliverable matter more than the label ‘IT’.
Is every IT freelancer eligible for the 1% rate?
No. A person may work in the technology sector but provide a prohibited service, receive income outside the special regime, or use an employment relationship rather than an independent business activity. We review the real work, contract, invoices, client and payment flow before recommending the status.
Is consulting allowed under Georgia’s Small Business Status?
Consulting is included in the statutory prohibited-activity list. This is especially important for IT professionals: software creation or hands-on technical delivery may differ from general advisory, management or strategic consulting. Computer consultancy may also be relevant to the IT Residence Permit activity list, but that immigration classification does not override the separate Small Business tax restriction.
What activities are prohibited for Small Business Status?
The statutory list includes activities requiring a licence or permit; currency exchange; medical, architectural, legal or notarial, audit and consulting activities (including tax consulting); gambling; personnel supply; and production of excisable goods and the related excluded investment category. The precise classification should be checked before applying or adding a new service.
What if I provide both software development and consulting?
Do not assume that the whole invoice qualifies. The services, pricing, deliverables and records should be separated and the effect of the prohibited activity on the status itself must be checked before the mixed engagement begins.
Are salary, dividends, interest or rent taxed at 1% if I hold Small Business Status?
No. Small Business Status does not convert every type of personal income into 1% turnover. Salary, dividends, interest, rent, royalties, gifts, certain capital gains and other listed receipts remain outside the special regime and are handled under the applicable ordinary rules.
Does payment from a foreign client automatically qualify for 1%?
No. Foreign customer location is not enough. The permitted activity, Georgian-source rules, status effective date, excluded income, VAT place of supply and any treaty position must be reviewed. The invoice currency and foreign bank account do not decide the result by themselves.
VAT for IT servicesWhat happens if turnover exceeds GEL 500,000?
The 3% rate applies from the beginning of the month in which the annual threshold is exceeded through the end of that calendar year. It is not limited to the amount above GEL 500,000. A separate two-consecutive-year rule can lead to status revocation.
Can ITResidency.ge check my activity before I apply?
Yes. Send a plain-language work description, current contract or draft, sample invoice wording, client countries, approximate turnover and any existing Georgian registration. We can identify the main classification, source and VAT questions before the status or invoicing position is used.
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