Small Business Status is 1% up to 500,000 lari, then 3%
An individual entrepreneur holding Small Business Status pays 1% of turnover in place of the standard 20% personal income tax, up to 500,000 lari of annual turnover; agritourism businesses get a 700,000 lari ceiling. Turnover above the limit is taxed at 3% and the status survives to the end of that year, but cross the line in two consecutive calendar years and the status is withdrawn from 1 January of the third. These are the rules as set out by the Georgian office of Andersen in a note dated 3 August 2026.
What the 1% does not cover
The regime applies to qualifying business income and nothing else. Rental income, capital gains, dividends, interest, royalties, gifts, inheritances and gambling winnings all stay under the general personal income tax rules. This is the point most often lost in conversation: a landlord who registers as an individual entrepreneur and takes Small Business Status does not thereby move the rent onto 1%. The rent keeps the treatment it already had. If the plan is to reduce tax on letting, this is the wrong instrument, and the right one is the separate regime for residential rental income.
The trades that are shut out
A long list of activities cannot use the status at all. Legal and notarial work, tax advice and audit, medical services, architecture and consulting are excluded. So are financial services such as currency exchange and financial intermediation, gambling, businesses dealing in excisable goods, staffing, and activities that need a special licence, with limited exceptions. The pattern is recognisable: the regime was built for small trading and service businesses, not for licensed professions. An adviser or an architect setting up here should price the standard rate into the plan rather than assume the 1% applies and be corrected later.
A monthly rhythm, not an annual one
Status holders file a return every month and pay the 1% by the fifteenth day of the month that follows. That is twelve filings a year rather than one, and it is the part that surprises people who arrive expecting a single annual declaration. Getting in is quick by comparison: register as an individual entrepreneur, then apply for the status electronically through the taxpayer account on the Revenue Service portal at rs.ge. Both steps are generally finished within one business day. The administrative work is small but it is relentless, and a missed month is the usual reason a clean record stops being clean.
Two years, not one
The ceiling is not a cliff. Pass 500,000 lari once and the excess is taxed at 3% while the status itself holds until the end of that calendar year, which gives a growing business a season to decide what it wants to be. Pass it in two consecutive years and the status goes from 1 January of the third. For a guesthouse or a small tour operator with one unusually strong summer, that structure is forgiving; for a business on a steady upward path it is a planning horizon, and the sensible moment to model the ordinary corporate route is the first year the ceiling is crossed rather than the year the status disappears.
Written by us from the source linked above, not investment, legal or tax advice. Figures and rules change — confirm anything that matters before acting on it.
