Obtain 1% Small Business Status in Georgia

Understanding Small Business Status in Georgia

Small Business Status (SBS) is a powerful legislative tax certificate granted by the Revenue Service of Georgia to qualified Individual Entrepreneurs. It transforms your legal tax obligation, replacing the baseline default 20% personal income tax with a flat, predictable 1% tax rate calculated strictly on your gross turnover.

How the Georgia 1% Flat Tax Works for Freelancers and Remote Workers

This tax regime is ideal for digital nomads, freelancers, software developers, remote consultants, copywriters, designers, and any international service provider who wants a fully legal, low-tax base in Georgia. It is one of the most competitive flat tax rates available to foreign workers anywhere in the world.

Commanding Turnover Thresholds: Enjoy the 1% flat rate for annual revenues all the way up to 500,000 GEL (~$180,000+ USD).
Progressive Safety Valve: If your gross turnover exceeds 500,000 GEL during the calendar year, the revenue above that limit is taxed at a modest 3% rather than invalidating your status.
Zero Profit-Expense Tracking: Because tax is levied strictly on top-line gross receipts, you do not need to collect, defend, or track business cost receipts for income tax purposes.
Swift Regulatory Activation: The tax certificate is filed and linked directly to your active 9-digit corporate profile through the online Revenue Service platform.

Which Freelance Activities Qualify for Georgia's 1% Tax? Permitted vs. Excluded Sectors

While the 1% tax regime is highly flexible, Georgian tax law restricts specific economic activities from utilizing this status. Operating a forbidden activity can trigger an retroactive 20% tax restructuring.

Allowed & Optimized Sectors	Prohibited / Excluded Sectors
IT & Software Engineering: Web development, application coding, SaaS solutions, IT infrastructure maintenance.	Financial Services: Currency exchange operations, banking, brokerage, microfinance, crypto trading.
Marketing & Copywriting: SEO strategy, digital ad management, content production, creative consulting.	Regulated Professional Activities: Legal counsel, notary offices, auditing services, specialized medical practices.
Design & Remote Consulting: UI/UX design, architecture drafting, project management, business advisory panels.	Gambling & Heavy Industry: Licensing of casinos, organization of lotteries, manufacturing of excisable goods.

The Certificate Activation Timeline

Acquiring the Small Business Status requires passing through precise synchronization points with the Revenue Service of Georgia.

Step 1: Baseline IE Pre-conditions Check

We audit your active Individual Entrepreneur profile in the National Agency of Public Registry (NAPR) to confirm all data fields, physical addresses, and primary NACE code classifications match perfectly.

Step 2: Revenue Service Application Submission

We access your official RS portal to format and lodge the formal petition for Small Business Status, explicitly specifying your primary service vectors according to the National Classification of Economic Activities.

Step 3: Verification & Certificate Issuance

The Revenue Service reviews and issues your electronic Small Business Certificate. The state status takes official effect on the first day of the calendar month immediately following the application approval date.

Critical Ongoing Compliance Rules

Maintaining your 1% status demands consistent adherence to monthly declarations and financial reporting boundaries:

Monthly Declarations Filing: You must submit an electronic tax declaration and transfer your 1% tax payment by the 15th of every following month (e.g., January's tax is due by February 15th).
The 100,000 GEL VAT Trigger: If your domestic or taxable revenue within Georgia surpasses 100,000 GEL in any rolling 12-month window, you must register for VAT. This is a separate framework that operates alongside your 1% status.
Two-Year Inactivity Trap: If you file zero declarations or fail to cross revenue thresholds for two consecutive calendar years, the state will automatically revoke your certificate.

1% Tax Registration for Freelancers & Digital Nomads - Small Business Status (SBS)