Who qualifies for 1% Small Business Status in Georgia

Small Business Status gives an Individual Entrepreneur a 1% rate on turnover up to 500,000 GEL a year. But an explicit list of activities is barred from the regime, and consulting — including tax consulting — is on it. Check your activity against the list before assuming the 1% applies to you.

Activities that cannot use the 1% regime

Resolution №415 Annex №4 bars specific activities from Small Business Status. The barred list includes consulting, medical practice, architectural work, legal and notarial services, audit, currency operations, gambling, personnel supply, the production of excise goods, and any activity requiring a licence or permit.

Consulting is the one that catches people. It is named explicitly, and tax consultants are named within it. A great many people registering an IE in Georgia describe their work as consulting on the strength of what their contracts say.

What matters is the substance of the activity, not the word on the invoice. If your work is genuinely software development, design, or writing, calling it consulting on an invoice does not exclude you — and the reverse is equally true.

Resolution №415 of 29.12.2010, Annex №4

Income that sits outside the regime

Separately from barred activities, Annex №5 lists income types that fall outside Small Business Status even when you hold it: property rental, lending income, gambling winnings, gifts, inheritance, dividends, interest, royalties, debt forgiveness, and gains on selling real estate, vehicles, securities or a partnership share.

That income is not taxed at 1%, and it does not count toward the 500,000 GEL threshold. It is taxed under its own rules.

Salary income is treated the same way. Holding a job and running an IE are separate tax positions, and salary never enters the 1% base.

Resolution №415, Annex №5; Tax Code Art. 90

The turnover limit

The regime applies to gross turnover up to 500,000 GEL in a calendar year. Wine tourism and agrotourism have a higher limit of 700,000 GEL.

Exceeding the limit in a single year does not by itself cancel the status, but it does change the rate for the rest of that year. Exceeding it in two consecutive years cancels the status from the following year.

Tax Code Art. 89–90; Order №999 (amended)

Foreign nationals: the 2026 work-permit requirement

From 1 March 2026, foreign nationals conducting business activity as an Individual Entrepreneur or self-employed person in Georgia need a Right to Engage in Labour Activity permit, under Government Resolution №70 as amended.

The permit is issued for a specific activity or sphere. Applications opened on 1 March 2026, and operating without one carries a 2,000 GEL fine.

This is separate from tax status. Holding Small Business Status does not satisfy it, and satisfying it does not grant Small Business Status.

Government Resolution №70 (20/02/2026), as amended by №85 and №109

FAQ

I write software but my contract says "consulting services". Am I excluded?
The exclusion follows the activity actually carried out, not the wording of a contract. If the work is software development, the contract label does not by itself bar you — but if the substance is advisory, the label will not save you either. Where the line is genuinely unclear, get it confirmed before you register rather than after.
Can I hold Small Business Status and a salaried job at the same time?
Yes. They are separate tax positions. Salary is taxed under its own rules and never enters the 1% base or the 500,000 GEL threshold.
Does rental income from my flat count toward the 500,000 limit?
No. Property rental is listed in Annex №5 as income outside the regime. It is neither taxed at 1% nor counted toward the threshold.

Sources

This guide summarises published Georgian regulations and cites its sources. It is not legal or tax advice, and it cannot account for your particular circumstances. You remain responsible for what you file.

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