Small Business Status is 1% up to ₾500,000, then 3% — and leasing sits outside it

An individual entrepreneur with Small Business Status pays 1% of turnover instead of the standard 20% personal income tax. The important word is turnover: the tax is charged on gross receipts, with no deduction for expenses. That makes it very cheap for a consultant, designer or developer with almost no costs, and much less attractive for a business where most of the money coming in goes straight back out again. Above the ceiling the rate steps up to 3% on turnover between ₾500,000 and ₾1,000,000, and above ₾1,000,000 the status is revoked and the entrepreneur returns to the standard regime from the following tax year. There is also a separate Micro Business regime at 0% for turnover up to ₾30,000, with its own restricted list of activities.

Worth flagging honestly: the source page is internally inconsistent about the ceiling. Its introduction says the status is available when annual turnover stays below ₾500,000, while its own summary table and body text describe a 3% band running from ₾500,000 up to ₾1,000,000 under the same status. Those are two different rules for the same taxpayer. If your turnover is heading anywhere near half a million lari, that is not a detail to settle from a blog post — the authoritative text is the Tax Code, and the Revenue Service is the body that applies it.

The excluded activities include licensed work — banking, insurance, medical and pharmacy, notarial and architectural services — along with legal services and consulting, accounting and audit, currency exchange and FOREX, employment and staffing agencies, gambling, leasing, and residential real estate brokerage. Construction services supplied to Georgian companies and individual entrepreneurs were added to the exclusions in February 2025. Two of those entries touch property directly: leasing, and residential brokerage. So an agent who sells flats for commission, or a company leasing assets, cannot use the 1% route for that income.

The source page lists leasing as excluded but never defines it, and the word rent does not appear anywhere on it. So it does not settle the question most landlords actually have: whether rent from a flat can sit inside the 1% regime at all. The Revenue Service treats the letting of residential space for residential purposes as its own preferential regime, listed separately from small business, which is a strong hint that the two are different doors rather than one. If this is your situation, get it confirmed in writing by an accountant or the Revenue Service before you file — the cost of the question is far lower than the cost of the wrong answer.