For a freelancer, taxes in Georgia can come to just 1% of income — thanks to Small Business Status for sole proprietors. This makes the country one of the best places for remote workers serving clients abroad. But to pay the minimum legally, you need to register correctly and keep proper records. Let's break down, step by step, how a freelancer sets up and which rate to actually choose.
What Options a Freelancer Has
A freelancer in Georgia most often chooses among three regimes:
- Micro Business (0%) — turnover up to 30,000 GEL per year, no employees.
- Small Business Status (1%) — a sole proprietor with turnover up to 500,000 GEL per year, taxed at 1% of turnover.
- Standard regime (20%) — ordinary income tax, if the special regimes don't fit.
For most IT specialists, designers, marketers and consultants, Small Business Status at 1% is optimal.
Micro Business: When 0% Fits
If your annual income does not exceed 30,000 GEL (roughly 11,000 USD at a rate of ~2.7) and you have no employees, you can obtain Micro Business status at a 0% rate. This is the ideal start for new freelancers with modest income.
As soon as income grows, it makes sense to switch to Small Business Status.
Small Business Status (1%): The Main Regime for a Freelancer
The most popular choice. The key rules:
- A rate of 1% on turnover (not profit — expenses are not deducted).
- A turnover limit of 500,000 GEL per year.
- Above the limit — 3%.
- If you exceed the limit two years in a row, the status is removed from January 1 of the third year.
Why It's Advantageous for a Freelancer
Most freelancers have minimal costs (a laptop, software, communications), so the 1% turnover tax is in fact almost equal to a tax on profit — and it's extremely low at that.
| Annual income | Rate | Tax |
|---|---|---|
| 50,000 GEL | 1% | 500 GEL |
| 120,000 GEL | 1% | 1,200 GEL |
| 250,000 GEL | 1% | 2,500 GEL |
How to Register: Step by Step
Step 1. Register a sole proprietorship
A sole proprietorship is registered through the House of Justice (NAPR) in about a day. A foreigner does not need a residence permit to register one.
Step 2. Obtain Small Business Status
After registering the sole proprietorship, file an application with the Revenue Service for the status. The 1% rate takes effect from the following month.
Step 3. Open an account and accept payments
Open an account with a Georgian bank to receive payments from clients. All incoming funds form your taxable turnover.
Step 4. File reports
The turnover declaration is filed monthly by the 15th of the following month via rs.ge, and the tax is paid at the same time.
Working with Foreign Clients
Small Business Status does not restrict where your clients are located — you can work with clients from any country. The important points:
- Report all incoming turnover correctly.
- Watch the VAT threshold (100,000 GEL) — once reached, you must register for VAT (18%).
- Keep tax residency in mind if you travel a lot.
Tax rules change — before registering, and as your income grows, verify them on the rs.ge portal or with a tax advisor.
Conclusion
Georgia offers a freelancer a rare combination: a legal 1% rate (or even 0% to start), fast registration, and the freedom to work with clients worldwide. To choose the right regime, not miss the VAT threshold and keep your reporting error-free, get in touch with the Angels Investment specialists for a consultation.
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FAQ
How much tax does a freelancer pay in Georgia?
Most often 1% of turnover under Small Business Status, or 0% under Micro Business up to 30,000 GEL.
Do you need to register a sole proprietorship?
Yes, for the 1% and 0% statuses you need to register a sole proprietorship and obtain the relevant status.
Can you work with clients from other countries?
Yes, there are no restrictions on where clients are located.
When do you need to register for VAT?
Once turnover reaches 100,000 GEL over 12 months, VAT registration is mandatory.
How often do you pay the tax?
Monthly — the declaration and payment are due by the 15th of the following month.