Q: What is Georgia's 1% small business tax?

Georgia's small business tax status ( მცირე ბიზნესი ) allows eligible sole proprietors and companies with annual turnover under ₾500,000 to pay a flat 1% tax on gross revenue instead of the standard income tax. This calculator helps you track all your income entries, converts foreign currency amounts to GEL using the NBG rate on the date of receipt, and computes your total tax liability.

Q: What happens when annual turnover exceeds ₾500,000?

If annual turnover exceeds 500,000 GEL , the tax rate increases to 3% on the portion of income above the threshold.

Q: When is VAT registration required?

If total turnover exceeds 100,000 GEL over any 12 consecutive months (a rolling window, not a calendar year), the entrepreneur becomes obligated to register as a VAT payer. This rule applies regardless of tax regime — it is equally in force for holders of small-business status. Key points: The threshold is calculated on a rolling 12-month basis , not per calendar year. Registration is mandatory within 2 business days of exceeding the threshold. Otherwise the Revenue Service registers you automatically and retroactively, with penalties. Once registered, you must charge VAT at 18% on all taxable transactions and file a VAT return monthly, by the 15th of the following month . VAT-payer status is permanent — it is kept even if turnover later drops below the threshold. Deregistration requires a separate application and is only possible under specific conditions (typically at least 12 consecutive months with turnover below the threshold). Certain transactions are zero-rated (e.g., export of goods, some services supplied to non-residents), but zero-rating does not exempt you from accounting and reporting obligations. Important: VAT is a separate obligation from the 1% turnover tax. A small-business status entrepreneur can simultaneously be a VAT payer — VAT is paid in addition to the turnover tax. Before crossing the threshold, consult an accountant: it may be worth restructuring client agreements (e.g., gross/net invoicing, zero-rated export structures) to prepare for the transition.

Question 1

What is Georgia's 1% small business tax?

Accepted Answer

Georgia's small business tax status (მცირე ბიზნესი) allows eligible sole proprietors and companies with annual turnover under ₾500,000 to pay a flat 1% tax on gross revenue instead of the standard income tax.

This calculator helps you track all your income entries, converts foreign currency amounts to GEL using the NBG rate on the date of receipt, and computes your total tax liability.

Question 2

How is the tax calculated?

Accepted Answer

For small business status entrepreneurs, the formula is simple:

Tax = 1% of turnover

For example:

Income: 5,000 GEL → Tax: 50 GEL
Income: 20,000 GEL → Tax: 200 GEL

The calculator performs this calculation automatically.

Question 3

Who can use the 1% regime?

Accepted Answer

The small business regime is available to individual entrepreneurs in Georgia if:

annual turnover does not exceed 500,000 GEL
the activity is not on the list of prohibited activities for this regime
the entrepreneur is registered as an Individual Entrepreneur

Question 4

What happens when annual turnover exceeds ₾500,000?

Accepted Answer

If annual turnover exceeds 500,000 GEL, the tax rate increases to 3% on the portion of income above the threshold.

Question 5

When is VAT registration required?

Accepted Answer

If total turnover exceeds 100,000 GEL over any 12 consecutive months (a rolling window, not a calendar year), the entrepreneur becomes obligated to register as a VAT payer. This rule applies regardless of tax regime — it is equally in force for holders of small-business status.

Key points:

The threshold is calculated on a rolling 12-month basis, not per calendar year.
Registration is mandatory within 2 business days of exceeding the threshold. Otherwise the Revenue Service registers you automatically and retroactively, with penalties.
Once registered, you must charge VAT at 18% on all taxable transactions and file a VAT return monthly, by the 15th of the following month.
VAT-payer status is permanent — it is kept even if turnover later drops below the threshold. Deregistration requires a separate application and is only possible under specific conditions (typically at least 12 consecutive months with turnover below the threshold).
Certain transactions are zero-rated (e.g., export of goods, some services supplied to non-residents), but zero-rating does not exempt you from accounting and reporting obligations.

Important: VAT is a separate obligation from the 1% turnover tax. A small-business status entrepreneur can simultaneously be a VAT payer — VAT is paid in addition to the turnover tax.

Before crossing the threshold, consult an accountant: it may be worth restructuring client agreements (e.g., gross/net invoicing, zero-rated export structures) to prepare for the transition.

Question 6

How are foreign-currency payments converted to GEL?

Accepted Answer

Exchange rates are fetched in real time from the official National Bank of Georgia API at nbg.gov.ge. This matches the methodology accepted by Georgian tax authorities for converting foreign income.

Question 7

Is this official tax advice?

Accepted Answer

This tool is provided for informational purposes only and does not constitute tax advice. Tax laws can change — always verify your calculations with a qualified accountant or the Georgia Revenue Service (rs.ge).

Frequently Asked Questions

Want more detail?