183 days makes you resident — and residents skip foreign income

Most people arrive at this rule assuming it works like a calendar: stay past the middle of the year and you are resident, start again in January. It does not. The test is any continuous twelve-month period that ends inside the current tax year, so a stay split across two calendar years can trigger residency in the later one even though neither year on its own reaches 183 days. Residency is also determined separately for each tax period, and days already counted toward residency in a previous period are not counted again for the next. Anyone splitting the year between two countries should be keeping a dated record of entries and exits rather than a mental estimate.

Resident individuals are exempt from Georgian tax on income that does not have a Georgian source. That is the provision behind most of what gets said about Georgia as a base, and on its own terms it is accurate. The limit sits in the words "Georgian source". Rent from a flat in Tbilisi is Georgian-source whoever receives it and wherever they live. Work performed in Georgia is generally Georgian-source even when the client and the payment are abroad. The exemption is about where income arises, not about where the money lands or which bank holds it, and that is the distinction on which an otherwise confident arrangement usually turns out to rest.

Two regimes exist below the flat 20%. An individual with annual turnover under GEL 30,000, no employees, who registers as a micro business, is exempt from tax on that business income. An individual entrepreneur with turnover under GEL 500,000 can register for small business status and pay 1% of turnover, rising to 3% where annual turnover will exceed GEL 500,000. The micro-business threshold is the one that goes unmentioned most often, and for someone letting a single property or running a one-person service business at a modest scale, it is the line worth checking against the actual numbers before assuming the 20% applies.

The two are separate instruments that happen to share a word. A residence permit is immigration status: it governs whether you may live here and for how long. Tax residency is a day count and a set of source rules: it governs which country may tax what. You can hold a permit and not be a tax resident, by not spending the days; you can be a tax resident on the day count without holding a permit. Arrangements go wrong most often where someone has optimised one and assumed the other followed, so if a plan depends on both, each needs checking against its own rule rather than against the other.