The 1% Tax Without Living in Georgia: What It Covers
Georgia's 1% tax is available without living in Georgia. Small business status goes to an entrepreneur natural person who is registered for tax, and no provision asks for residency, citizenship or a minimum number of days. What moves when you leave is the tax base, not your eligibility: the 1% reaches Georgian-source income, so the question becomes which of your invoices Georgia counts, and which filings follow you abroad.
- Small business status is granted to an entrepreneur natural person who is registered for tax in Georgia. Tax residency, citizenship and a residence permit are not part of that test.
- The 1% is charged on Georgian-source income, and a Georgian resident's service to a client in another state stays Georgian-source unless it is delivered through a permanent establishment in that other country.
- Georgian tax residency is a separate test: at least 183 days of presence inside any rolling 12 calendar months that end in the tax year, each part-day counted whole.
- A resident's non-Georgian-source income is exempt, and a non-resident is taxed in Georgia on Georgian-source income alone.
- The monthly return and the tax fall due by the 15th of the following month wherever you are, and a month you do not file is not treated as a zero return.
- 58 double tax treaties are in force, and none of them is with the United States or Russia.
Do you need to live in Georgia to hold the status?
No. Small business status may be granted to an entrepreneur natural person, and that single sentence is the whole of the eligibility test in the Tax Code. The instruction on special tax regimes adds one condition the Code leaves out: the person has to be on tax registration. Tax registration, not tax residency.
Registration as an individual entrepreneur in the Registry of Entrepreneurs comes first, and the application for the status goes to the tax authority after that.
The rule runs the other way too. Registering a business in Georgia does not make you a Georgian tax resident, because residency comes from Article 34 and nowhere else. That article holds 2 automatic routes, the day count and Georgian state service abroad, and 3 grants that have to be asked for: a high net worth individual, a Georgian citizen whose residency in no country can be established, and other foreign individuals in cases the Minister of Finance defines. A visa, a residence permit, a registered address and an individual entrepreneur registration appear in none of them.
What the 1% is actually charged on
The rate under the regime is 1%, set by Article 90(1). The income it applies to is Georgian-source income, leaving out salary and the income types the Government lists separately. The conditions that come with the status are the same wherever the holder lives.
Gross income from economic activity is capped at GEL 500,000 a calendar year, or GEL 700,000 where the operator works in wine tourism or agro tourism. Cross the cap and 3% applies instead, from the start of whichever month records the excess through to the end of that calendar year. Outside the regime the general personal income tax rate is 20%.
Can you hold the status? An entrepreneur natural person, on tax registration, not carrying on one of the excluded activities. Nothing here asks where you live.
What does the 1% reach? Georgian-source income, excluding salary and the income types the Government lists. This is where living abroad starts to matter, because the source rules in Article 104 turn on where a service is rendered and whether the supplier is a Georgian resident.
Tax residency answers neither question. It is a third test, and what it settles is what else Georgia may tax.
Where the work is done, and what makes income Georgian-source
Article 104 defines Georgian-source income. Services actually rendered in Georgia are Georgian-source. So are services where the supplier and the recipient are in different states and the supplier is a Georgian resident, unless the supplier delivers them through a permanent establishment in another country. Where the money is received is not taken into account, so a foreign bank account moves nothing in either direction.
A Georgian resident's service to a client abroad therefore stays Georgian-source even when the work itself is performed outside Georgia. The clause sets no condition about physical performance, and the foreign permanent establishment is its only carve-out.
| Your situation | Georgian-source? | What decides it |
|---|---|---|
| Resident, working from Georgia for clients abroad | Yes | The service is rendered in Georgia |
| Resident, working from abroad for a client in another state | Yes, unless delivered through a permanent establishment in that other country | The supplier is a Georgian resident |
| Non-resident, working while physically in Georgia | Yes | The service is rendered in Georgia |
| Non-resident, working wholly outside Georgia | Neither of the 2 clauses above is met on those facts | Article 104 sets no further test for services |
| Any of the above, paid into a foreign account | Unchanged | Where the income is received is not taken into account |
Once the laptop is open in Tbilisi, tax follows where the work is done rather than where the client is, and those same days count towards the residency test.
If part of your year is spent in Georgia and part of it elsewhere, send us the facts of your own year and David Sisvadze will set out in a signed written opinion which of your invoices the 1% reaches.
The 183-day test, and what residency changes
Article 34 of the Tax Code makes you a Georgian resident for an entire tax year once your days of actual presence reach 183 across any unbroken run of 12 calendar months that closes inside that year. Because the window rolls rather than following the calendar, a stay that straddles 2 calendar years can make you resident for a year you thought you had spent abroad.
4 counting rules decide the arithmetic:
- Any part of a day spent in Georgia counts as a full day.
- Days spent abroad still count as Georgian days when you went for treatment, leisure, a business trip or study.
- Days in Georgia do not count at all when spent as a diplomat or consular officer or their family, as staff of an international organisation under a Georgian treaty, as a foreign state servant or their family other than Georgian citizens, in transit, or for treatment or leisure.
- Residency is settled tax period by tax period, and a day already used to establish it is not counted a second time for the next.
What residency then does is narrow. A resident pays nothing on income that falls outside the Georgian source rules, and a non-resident is taxed on Georgian-source income and nothing else. Both rules describe the same boundary from opposite sides, which is why the source question carries more weight here than the day count does.
Residency without 183 days in the country
Article 34 also lets the Minister of Finance make a high net worth individual resident, and Order No 60 of 1 March 2023 sets the conditions. They are heavier than the day count they replace.
- The wealth test is met by confirmed assets over GEL 3,000,000, or by annual income over GEL 200,000 across the 3 tax years before the application.
- Every route also requires property in Georgia worth at least USD 500,000 in GEL equivalent, which is where the high net worth route stops for anyone who does not already own Georgian property.
- Route A adds a residence permit, a residence card or a Georgian citizen ID. Route B looks at earnings instead: GEL 25,000 or more from Georgian sources in the tax year before you apply.
- The application reaches the Revenue Service on paper or electronically, filed by you or by a representative, and the Minister grants residency on the Revenue Service's submission. Complete documents reach the Minister within 7 working days, and deficiencies get up to 30 days to cure.
- Residency is granted for 1 tax year at a time, the documents are filed again for every further year, and a residency certificate can be requested only for the year of the application.
The filings that do not pause while you are abroad
The monthly return is filed and the tax paid by the 15th of the month after the reporting month, under Article 93(1.1) and the instruction on special tax regimes. One return covers one month and carries that month's tax with it, so a month spent outside the country is a filing month like any other.
No advance payments are due under the regime. The record book is kept in the prescribed form, tax documents are kept for 3 years, and a loss made under the regime is not carried forward.
Income that falls outside the 1% and is taxed under the general rules goes on an annual return instead, due by 31 March of the following year. VAT is a separate test again: taxable supplies that exceed GEL 100,000 within any 12 consecutive calendar months make registration compulsory, and most services supplied to foreign business customers fall outside Georgian VAT and never count towards that threshold.
A month you do not file is not treated as a zero return. Order No 999 was amended in 2026 to say so, which puts the late filing rules on any month left blank.
The fine is 5% of the tax due under the return while the return is up to 2 months late, and 10% after that. Late payment interest runs at 0.05% of the unpaid tax for every overdue day, and the day of payment counts as overdue.
A return that shows no tax to pay carries no late filing fine. The return is still owed, and the fine comes back as soon as a month carries tax.
Proving which country taxes you
The tax residency certificate is issued by the tax authority under Minister of Finance Order No 633. A Georgian resident applies electronically, giving the name and full address in Georgian and English together with the Georgian taxpayer identification number, and the certificate is issued electronically in the approved form. A certificate proves residency rather than creating it, so the day count has to be met before the application is worth making.
Two further rules matter to anyone dealing with a foreign tax office. Where you present that country's own residency form, with a notarised Georgian translation, the tax authority must confirm your Georgian residency on the form itself by signature and seal, provided the form has a field for it. And a foreign residency certificate filed in Georgia needs no apostille or legalisation.
The Ministry of Finance list of double tax treaties shows 58 in force, with the Multilateral Instrument modifying 34 of them. The United States is not on the list and neither is Russia.
What a treaty does for you depends on its own text. In the United Kingdom and Germany treaties, business profits are taxable only in the state of residence unless the enterprise carries on business in the other state through a permanent establishment there, and only the profit attributable to that establishment follows. Where both states treat the same individual as resident, both treaties settle it in 4 steps, taking permanent home, then closer personal and economic relations, then habitual abode, then nationality, before the competent authorities are left to agree it between themselves.
What can cost you the status
Article 89(2) lists 5 grounds for revoking small business status and no others: gross income from economic activity above the limit in each of 2 calendar years; the holder's own application before the end of the calendar year; carrying on an activity excluded under Article 88(2); at least 3 cash register fines in a calendar year; and no longer satisfying Article 88(1), which means no longer being an entrepreneur natural person. The instruction adds 1 more, the death of the individual.
The dates differ by ground. Turnover revocation runs from the start of the year after the second year, and the status cannot be regranted in that year. An own request takes effect from the 1st day of the next month. A prohibited activity or 3 cash register fines run from the start of that calendar year, and ceasing to be an entrepreneur from the date it happens. Cancellation for a prohibited activity or 3 cash register fines also carries a GEL 500 fine.
The excluded activities travel with the holder wherever the work is done. There are 7 of them: activities needing a licence or permit, except the Tbilisi taxi permit; activities requiring significant investment; currency exchange; medical, architectural, advocacy or notary, audit and consulting work, tax consultants included; gambling; the provision of personnel; and the production of excise goods. Anyone whose work is advice rather than delivery should test it against the activities that can never use the 1% before applying, because consulting is on that list.
Losing Georgian tax residency, or never having had it, is not one of those grounds, and the instruction does not add it either. What catches a person who leaves Georgia is the ordinary ground: ceasing to be an entrepreneur natural person.
Frequently asked questions
Do I need to live in Georgia to get the 1% tax?
No. Small business status is granted to an entrepreneur natural person who is registered for tax, and neither the Tax Code nor the instruction on special regimes sets a residency, citizenship or minimum presence condition. The question that follows you abroad is which income is Georgian-source, because that is what the 1% is charged on.
Can I keep small business status if I move abroad?
Yes. Moving abroad is not one of the 5 grounds for revocation in Article 89(2), and that list is closed. The ground that does catch people who leave is the plain one, giving up the individual entrepreneur registration, which ends the status from the date it happens.
Is my income taxed at 1% if I work from outside Georgia?
That depends on whether the income is Georgian-source, which is the only income the 1% reaches. A Georgian resident's service to a recipient in another state is Georgian-source even when it is performed abroad, unless it is delivered through a permanent establishment in that other country. For a non-resident working wholly outside Georgia, neither that clause nor the one for services rendered in Georgia is met on those facts.
How many days do I have to spend in Georgia to become a tax resident?
At least 183, and they do not all have to fall inside one calendar year: the count runs over any unbroken 12 calendar months that close in the tax year, and reaching it makes you resident for the whole of that year. An hour in the country counts as a full day, and days abroad for treatment, leisure, a business trip or study still count as time in Georgia. Days already used to make you resident in one tax period are not used again for the next.
Does paying 1% in Georgia stop another country taxing me?
Georgian law answers only the Georgian half of that. Georgia taxes a resident on Georgian-source income and exempts the rest, and taxes a non-resident on Georgian-source income only. Where the other country has a treaty with Georgia, the treaty allocates the taxing rights and relief is claimed under Order No 633, with a residency certificate as the proof.
Can I get a Georgian tax residency certificate if I do not live in Georgia?
The certificate is issued to a Georgian resident, so residency has to exist first. The high net worth route grants residency for 1 tax year at a time without the 183 days, and a certificate under it can be requested only for the year in which the application was filed.
Does Georgia have a tax treaty with my country?
The Ministry of Finance lists 58 treaties on the avoidance of double taxation in force, and the Multilateral Instrument modifies 34 of them. The United States is not on that list and neither is Russia.
Do I still file the monthly return in a month with no income?
Yes. The return is due by the 15th of the following month even when the month brought in nothing, and a month you do not file is not treated as a zero return. A month that produces no tax carries no late filing fine, but the tax authority still sees an unfiled month rather than an empty one.
Does a Georgian client withhold tax when it pays a non-resident with the status?
That turns on whether the non-resident has a permanent establishment registered in Georgia. Without one, a non-resident's Georgian-source income is taxed at source under Article 134: 5% on dividends, interest and royalties, 10% on other Georgian-source payments and 20% on salary. A permanent base where a non-resident individual carries on economic activity is itself a permanent establishment under Article 29, and the Code does not say whether an individual entrepreneur registration creates one.
What if I am in Georgia for a few weeks and work while I am here?
Services actually rendered in Georgia are Georgian-source income, so that work sits inside the Georgian base whoever the client is, and each part-day counts towards the 183. Salary is different. It is outside the 1% regime altogether, and a non-resident's salary paid by a non-resident employer for work in Georgia is exempt where the work lasts no more than 30 calendar days in a tax year and no Georgian permanent establishment bears the cost.