---
title: "Income Tax Planning"
url: "https://legal.ge/en/service/tax-law-en/income-tax-planning-en"
field: "Tax Law"
description: "Income tax planning: the 20 and 5 percent rates, exemptions and special regimes for individuals — explained by Legal.ge."
reviewed: "2026-06-23"
updated: "2026-10-14"
publisher: "legal.ge"
---

# Income Tax Planning

> Source: legal.ge, https://legal.ge/en/service/tax-law-en/income-tax-planning-en

## Rates: General and Preferential

Income tax planning begins with the exact rates: the taxable income of an individual is taxed at 20 percent unless the Tax Code provides otherwise. That is the general rule, but the law also contemplates several preferential rates: income received by an individual from renting residential space to an organization, legal entity or individual for residential purposes, where that individual claims no deductions from this income, is taxed at 5 percent; and the excess income received by an individual from the supply of a residential flat (house) with the land plot attached to it, as well as from a motor vehicle, is likewise taxed at 5 percent.

Differentiated rates are the first planning instrument: the same economic result — income from property, for instance — may carry considerably less tax depending on the legal form chosen, which is why the choice of form is the central question of tax planning. The computation of excess income is defined by the corresponding norm of the Code, so the figures are best calculated before a sale is even intended.

The full text is available on legal.ge after signing in: https://legal.ge/en/service/tax-law-en/income-tax-planning-en

### What is the general rate?

20 percent of an individual's taxable income, with preferential cases at 5 percent.

### What happens to the excess from a property sale?

After the required ownership period the excess is not taxed at all; otherwise it is taxed at 5 percent.

### Is foreign income exempt?

Yes — income of a resident individual not received from a source in Georgia is not taxed.

### Which statuses reduce the burden?

The statuses of micro business, small business and fixed-tax payer.