Self-employment taxation, particularly the "Small Business Status," represents one of the most attractive and popular regimes within the Georgian tax system. This service is designed for individuals engaged in independent economic activities who wish to benefit from tax incentives. Current Georgian legislation offers a unique opportunity for individuals conducting specific categories of activities to pay only 1% of their turnover as income tax. This regime is especially favorable for freelancers, IT specialists, creative professionals, and small entrepreneurs whose annual income does not exceed 500,000 GEL. Proper tax planning and timely acquisition of the status are critically important, as incorrectly registered activities or violations of declaration rules can lead to the standard 20% income tax rate being applied. Through our platform, you can connect with qualified tax lawyers and accountants who will ensure your activities are fully compliant with the law.
This service includes full legal and tax support for Individual Entrepreneurs (IE), starting from registration to monthly reporting. Specific sub-services include:
- Registration as an Individual Entrepreneur: Organizing the registration process at the Public Service Hall and selecting the correct economic activity codes (NACE codes).
- Obtaining Small Business Status: Preparing and submitting an application to the Revenue Service to receive the special tax regime (1% rate).
- Analysis of Prohibited Activities: Consulting on whether your activity qualifies for the preferential tax regime (legislation excludes certain activities, such as consulting services, from this regime).
- Tax Declarations: Preparing and submitting simplified monthly declarations on the Revenue Service portal (RS.ge).
- VAT Liability Monitoring: Consulting on the obligation to register for Value Added Tax (VAT) if the turnover exceeds the 100,000 GEL threshold in a rolling 12-month period.
- Annual Limit Control: Monitoring the 500,000 GEL threshold to avoid triggering the 3% rate or cancellation of the status.
In practice, there are frequent situations where this service is essential. For example, a graphic designer working for international clients registers as an IE and obtains Small Business Status to pay 1% of their income. Another common scenario is a software developer who wants to legally receive payment from a foreign company; they need not only registration but also a proper contract and invoicing system that complies with the Tax Code of Georgia. Also, an owner of a small online shop selling handmade items is obliged to keep records and file declarations. Another case involves a foreign citizen moving to Georgia, becoming a tax resident, and wishing to utilize local low taxes for their remote work. In all these cases, qualified assistance minimizes tax risks.
Self-employment taxation in Georgia is regulated by the Tax Code of Georgia. Specifically, special chapters of the code define the statuses of Micro (0%) and Small (1%) Business. Also important is the Government of Georgia Resolution on "Special Taxation Regimes," which details the list of activities not eligible for the preferential regime (e.g., consulting services, medical activities, etc.). Additionally, the Law on Entrepreneurs of Georgia regulates the legal grounds for registering an individual as an entrepreneur. Knowledge of these laws is essential for an entrepreneur to correctly determine their tax liabilities and avoid penalties for incorrect filing.
The process of working with a specialist involves several stages. First, an audit of the client's activity is conducted to determine if it meets the Small Business criteria. Then, the specialist prepares the documents for submission to the Public Service Hall. After registration, registration on the RS.ge portal takes place within 24 hours, followed by the application for Small Business Status (which must be done immediately so the status becomes active from the following month). After the end of each month, no later than the 15th of the following month, the specialist fills out and sends the income declaration. The client only needs to pay the tax to the specified treasury code.
Legal.ge is your trusted partner in tax matters. Our platform gives you access to verified tax experts with years of experience in small business taxation. Finding a specialist on Legal.ge means guaranteed quality, confidentiality, and the assurance that your business is fully protected from tax risks. Do not risk penalties; find your personal tax advisor today.
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