Georgia remains one of the most business-friendly countries in the region. Simple tax rules, no currency control, and quick company registration attract entrepreneurs from Europe and the CIS. Individual entrepreneurs can benefit from reduced rates, and companies in IT, logistics, and export can apply for special statuses — such as Small Business, Virtual Zone, or Free Industrial Zone — to optimize their tax load.
In this article, we explain how taxes work for individual entrepreneurs and LLCs in Georgia, what regimes are available, and how to build a legal, efficient structure for your business.
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Taxes for Business in Georgia
Georgia has a concise set of main taxes, which apply depending on the type of business and its activity. Here is a detailed overview:
Personal Income Tax (20%). All employee salaries are subject to a 20% income tax, which the employer withholds and submits to the Revenue Service. Employers also contribute 2% to the social security/pension fund.
Corporate Income Tax (15%). This tax applies to profits of companies such as LLCs, but only when profits are distributed to shareholders. If profits are retained within the business for reinvestment, the company does not pay tax. This system is known as the Estonian model. It encourages companies to grow and reinvest profits without immediate tax pressure, making Georgia particularly attractive for startups and expanding businesses.
Value Added Tax (VAT, 18%). VAT applies to most goods and services. Companies must register for VAT if their annual turnover exceeds ₾100,000. While domestic sales are taxed at 18%, exported goods and services are typically exempt, which supports companies targeting international clients. VAT returns are filed monthly or quarterly online, simplifying the process for businesses of all sizes.
Dividend Tax (5%). When a company distributes profits to its shareholders, a 5% dividend tax applies. If a Georgian company receives dividends from a foreign entity, the same rate may apply when the funds are transferred to Georgia. This tax ensures fair treatment of distributed profits without penalizing reinvested earnings.
Property Tax (up to 1%). Local municipalities calculate property tax based on the value of real estate or other company-owned property. The maximum rate is 1%, but individual municipalities can set lower rates. This tax applies to offices, warehouses, and other business property, making it essential for companies with physical assets to include it in their planning.
Excise Tax. Excise applies to specific categories of goods, including alcohol, tobacco, fuel, and vehicles. Most service-oriented and IT businesses are not affected, but companies dealing in excisable goods must carefully calculate taxes and comply with reporting requirements.
Taxes for Individual Entrepreneurs in Georgia
Georgia provides several simplified tax regimes designed to support freelancers, small business owners, and self-employed professionals. The main difference between them lies in the annual turnover and type of activity.
Small Business Status (1% Tax Rate)
Entrepreneurs with an annual turnover of up to ₾500,000 can register as Small Business (მცირე ბიზნესი) and pay just 1% of total revenue instead of income tax. Features:
the regime is available for most types of services, consulting, IT, and creative work;
it does not apply to trade, construction, gambling, alcohol, or tobacco production;
no corporate tax or VAT applies unless turnover exceeds ₾100,00;
the entrepreneur must keep basic accounting records and issue invoices for every transaction.
If the annual income exceeds ₾500,000 twice within two consecutive years, the business automatically loses this status and switches to the standard tax regime.
Micro Business Status (0% Tax Rate)
Self-employed individuals earning up to ₾30,000 per year and without hired employees can apply for Micro Business status. Features:
the tax rate is 0%, meaning there is no income tax obligation;
accounting is minimal — only a simple record of income is required;
the entrepreneur cannot hire staff or conduct business through a company structure.
This status is ideal for freelancers, small artisans, and independent specialists who operate on their own.
Standard Individual Entrepreneur (20% Income Tax)
Entrepreneurs who do not qualify for the small or micro business regime pay a 20% income tax on net profit — that is, income minus expenses. Features:
expenses must be documented with invoices or receipts;
VAT registration becomes mandatory if annual turnover exceeds ₾100,000.
This regime is suitable for medium and large-scale service providers or import/export activities with significant costs.
Additional Obligations
Pension contribution: entrepreneurs must pay 4% of their declared income to the national pension fund (2% by the entrepreneur and 2% matched by the state).
Reporting: tax declarations are submitted monthly or quarterly through the online Revenue Service portal.
Foreign income: income received from abroad is taxable in Georgia, but double taxation treaties may apply, allowing businesses to avoid paying tax twice.
International Company Status and Special Tax Regime in Georgia
Georgia offers a special International Company status designed to attract foreign businesses, especially in the IT, logistics, and service export sectors. This regime allows companies to pay significantly lower taxes compared to the standard system.
The status is available to companies that provide services abroad — meaning their clients are outside Georgia. Typical examples include software development, consulting, outsourcing, digital marketing, and financial or logistics support.
Key tax benefits:
corporate income tax — 5% instead of 15%;
personal income tax — 5% on employee salaries (instead of 20%);
dividend tax — 0%;
no VAT on services exported outside Georgia;
no property tax on assets used in eligible activities.
To qualify, a company must be registered in Georgia and meet several conditions:
conduct international (cross-border) business activities;
employ local staff and keep transparent accounting;
obtain official approval from the Ministry of Finance.
The international status is valid indefinitely, as long as the company continues to meet the criteria. However, it can be revoked if the business starts working mainly with Georgian clients or fails to maintain proper documentation.
This regime has become one of the most popular tools for IT and digital companies relocating from the CIS, EU, or the Middle East. It offers legal tax optimization and a stable, predictable environment for international operations.
Virtual IT Zone in Georgia
The Virtual IT Zone is another special regime that supports technology and software businesses in Georgia. It is designed for entrepreneurs and companies that create or export digital products and services.
Any Georgian-registered company or individual entrepreneur engaged in software development, IT consulting, or digital service export can apply for Virtual Zone status. The process is straightforward and done entirely online through the Revenue Service portal.
Main advantages:
0% corporate tax on income earned from software development and digital exports;
0% VAT on cross-border transactions;
no customs duties for digital services (as they are non-physical goods);
simplified accounting and reporting.
Unlike the International Company regime, the Virtual Zone does not reduce personal income tax for employees — it applies mainly to company profits. However, many IT freelancers and startups choose this option because it offers tax-free exports and easy compliance.
The tax exemption applies only to income generated from abroad. If the company sells software or provides IT services within Georgia, regular taxes apply.
The Virtual Zone certificate has no expiration date and remains valid as long as the company continues its IT activities. Many foreign specialists use this model to relocate their tech business to Georgia and operate legally with minimal taxation.
Free Industrial Zones (FIZ) in Georgia
Free Industrial Zones (FIZ) are special economic areas that offer maximum tax benefits and simplified regulations for companies working in production, trade, logistics, and international services.
There are four active FIZs in Georgia:
Poti FIZ — located near the Black Sea port, ideal for import/export and logistics companies;
Kutaisi FIZ — focused on light industry, electronics, and manufacturing;
Tbilisi FIZ — convenient for trade, warehousing, and assembly operations close to the capital;
Hualing Kutaisi FIZ — part of the Chinese Hualing Group, specializing in manufacturing, trade, and export of industrial goods.
Tax benefits in FIZ:
0% Corporate Tax,
0% VAT on transactions within or outside the zone,
0% Property Tax,
0% Dividend Tax for non-resident shareholders,
no import or export duties for goods moving through the zone.
These incentives make FIZs an excellent choice for export-oriented manufacturing, international trading, or logistics hubs. Companies can operate in the zone either by registering a new entity there or by leasing space from an existing FIZ operator.
Operating within a Free Industrial Zone comes with several important conditions.
First, business activity must be conducted within the physical boundaries of the zone or be directly linked to export operations. This means a company cannot simply register in an FIZ and continue working elsewhere in Georgia — production, logistics, or service delivery must actually take place in the zone.
Second, sales inside Georgia are not tax-free. If a company registered in an FIZ sells goods or services to Georgian residents or businesses, those transactions are treated as domestic sales and are subject to standard Georgian taxes, including VAT and corporate income tax.
Third, every zone is operated by a private management company, which handles registration, rental contracts, and infrastructure services. Conditions differ from one FIZ to another — for example, lease rates, minimum investment amounts, and the level of administrative support may vary significantly. It’s important to review the operator’s policies before signing any agreement.
Finally, all companies in an FIZ must comply with Georgian customs and reporting requirements when moving goods in or out of the zone. This ensures transparency and helps avoid issues when exporting to the EU or neighboring markets.
VAT Refund and Declaration Process
A VAT refund becomes possible when the input VAT (the tax paid on purchases and expenses) exceeds the output VAT (the tax collected from customers). For example, if a company exports goods or invests heavily in equipment, it often ends up with a refundable balance.
To claim a refund, a company must:
file the VAT declaration through the Revenue Service portal,
confirm the accuracy of tax invoices and supplier information,
submit a refund request — usually processed within 30 calendar days.
The Revenue Service may conduct an automated or manual audit before approving the refund. In most cases, refunds are credited directly to the company’s bank account.
Export operations are zero-rated under Georgian tax law, meaning exporters can recover all input VAT even though they do not charge VAT to their foreign buyers. This makes the country’s VAT system particularly attractive for manufacturers, exporters, and IT service providers.
How to Declare Taxes in Georgia
All businesses in Georgia — including individual entrepreneurs and LLCs — are required to file tax declarations online through the Revenue Service portal. Registration on the portal is mandatory once the company receives its taxpayer identification number.
Declarations are usually filed monthly or quarterly, depending on the type of tax and business structure:
VAT — monthly by the 15th of the following month;
Income tax and payroll tax — monthly;
Corporate income tax — annually, but only when profit is distributed;
Small business tax — monthly, based on turnover.
The declaration process is straightforward:
Log in to the Revenue Service portal using your company ID.
Fill in or upload the relevant declaration form.
Verify tax amounts automatically calculated by the system.
Pay the due amount through an online bank or directly via the payment link.
The Georgian tax system is fully digital — once the declaration and payment are confirmed, no paper submission or physical signature is required.
Penalties for Late Payment or Non-Submission
Failure to file tax declarations or pay taxes on time may result in fines and interest:
late filing of a declaration — fine of ₾200–₾400, depending on the tax type;
late payment — 0.05% interest per day on the unpaid amount;
repeated violations may trigger an additional penalty or a temporary account freeze until all obligations are settled.
The Revenue Service sends electronic reminders through the taxpayer’s account, but responsibility for timely filing always remains with the company or entrepreneur.
Declaration Rules by Tax Regime
Different tax regimes in Georgia have distinct filing and reporting requirements:
Small Business (1%) — must file a simplified monthly turnover declaration; no expense reporting is required.
Micro Business (0%) — exempt from tax declarations if turnover remains below the threshold (₾30,000 per year).
Standard LLCs — must report VAT monthly, payroll tax monthly, and profit tax annually (upon dividend distribution).
International Companies and Virtual IT Zone entities — file simplified returns, but must provide proof that income was generated from eligible international activities.
Free Industrial Zone residents — submit annual reports to both the Revenue Service and the FIZ administration.
Each regime has slightly different submission schedules and documentation requirements. Using an accountant familiar with Georgian tax rules ensures timely compliance and avoids unnecessary fines.
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