Micro Business Status Georgia: 0% Tax Under GEL 30,000
Micro business status is Georgia's 0% regime for people who earn a small amount from their own work. It runs to GEL 30,000 of gross income in a calendar year, it allows no hired staff, and above it sits the 1% small business regime with a limit of GEL 500,000. Here is who qualifies, which activities can never use it, what you file, and what happens on the day you outgrow it.
- Micro business status charges 0% income tax, for an individual whose gross income from economic activity stays within GEL 30,000 in a calendar year and who uses no hired labour.
- You do not have to be registered as an individual entrepreneur to hold it, and it cannot be granted to a person registered for VAT.
- Consulting, audit, medical, architectural, advocacy and notary work, gambling, currency exchange, licensed activities and most trade are outside the regime, whatever the amounts involved.
- Filing is one annual income tax return, due by 31 March. There is no monthly declaration and no advance payment.
- Pass GEL 30,000 or hire someone and you have 15 days to apply for small business status. Miss that window and income from 1 January up to the day you apply is taxed under the general rules at 20%.
What micro business status is
The regime runs to 3 articles of the Tax Code of Georgia: Article 84 sets the conditions, Article 85 the grounds for revocation and Article 86 the exemption. Income covered by the status is exempt from income tax, which is what the 0% means. The detail sits under them: a Government resolution names the banned activities, and a Ministry of Finance instruction carries the application, the annual return and the revocation grounds.
The ceiling is GEL 30,000 of gross income from economic activity, counted across the calendar year rather than across a rolling 12 months the way the VAT threshold is. It is the running total that counts, and the day it crosses GEL 30,000 is the day the status has to change, not 31 December.
The second condition is staff, and it is absolute. A micro business uses no hired labour at all, and the only softening is that family members working in the business are not treated as hired.
You do not need to be registered as an individual entrepreneur, which sets this regime apart from the others. What you cannot be is a VAT payer: the status cannot be granted to one, and a VAT registration obligation arising later ends it.
| Rule | What applies |
|---|---|
| Income tax rate | 0% |
| Income limit | GEL 30,000 of gross income from economic activity, per calendar year |
| Hired staff | None, and family members are not treated as hired |
| Individual entrepreneur registration | Not required |
| VAT registration | The status cannot be granted to a VAT payer |
| Return | One a year, due by 31 March |
| Tax documents | Kept 3 years from the end of the calendar year |
Who can hold micro business status
The Code opens the status to a natural person who independently carries out economic activity, uses no hired labour, and keeps total gross income for the calendar year within GEL 30,000. Neither Article 84 nor the Ministry of Finance instruction under it adds a condition of Georgian tax residency, citizenship, a residence permit or a count of days in the country. What decides it instead is the activity itself.
Activities that cannot use the 0%
Annex 2 of Government Resolution No 415 sets out 6 groups of activity that micro business status cannot cover:
- Activities that need a licence or a permit, with the Tbilisi taxi permit excepted.
- Activities whose income during a calendar year may exceed GEL 30,000.
- Currency exchange operations.
- Medical work, apart from a village doctor and a nurse or feldsher engaged in the state programme, along with architectural work, advocacy and notary work, audit, and consulting, tax consultants included.
- Gambling.
- Trade, unless the purchased goods are processed before they are supplied.
The same professions are closed out of the 1% regime by the parallel list, so a consultant, an auditor or an advocate fails both tests and is left with the general rules at 20%. The second item bites before any money is counted: it excludes an activity whose income may exceed GEL 30,000 in a calendar year, not only one whose income did.
Crafts that sit outside the GEL 30,000 limit
Annex 1 of the same resolution lists 25 crafts and repair activities that are not subject to the GEL 30,000 limit at all: making carpets, clothing, wooden goods and musical instruments, repairing household goods, shoes and watches, laundry work and similar trades.
The exception carries 2 conditions. The work is done personally, with no hired labour, and the output is sold at retail.
A tailor who makes and alters clothing alone and sells to private customers is inside Annex 1. So is a one-person shoe repair shop, a watch repairer and a laundry.
For all 4, the GEL 30,000 ceiling does not apply, as long as the work stays personal, nobody is hired and the customers are retail. Take on one assistant and the exception goes, and the status goes with it.
Micro business, the 1% and the general rules
Georgia taxes an individual's business income under one of 4 regimes, and micro business status is the smallest of them.
| Regime | Income tax | Income limit | Returns and payments |
|---|---|---|---|
| Micro business | 0% | GEL 30,000 a calendar year | One annual return by 31 March, no advance payments |
| Small business | 1%, rising to 3% from the start of the month the limit is passed | GEL 500,000 a calendar year, GEL 700,000 for wine tourism and agro tourism operators | A return and a payment every month by the 15th, no advance payments |
| Fixed tax | A set monthly amount per object, for example GEL 50 per hairdressing workplace and GEL 30 per manicure workplace | Set per object rather than by annual income | The fixed monthly amount, no advance payments |
| General rules | 20% | None | Annual return by 31 March, with entrepreneurs paying 25% advances on 15 May, 15 July, 15 September and 15 December |
Staff and registration separate the regimes as sharply as the rates do. A micro business may not hire anyone; a small business holder may, and up to GEL 6,000 of salary paid in a calendar year escapes tax at source where the holder took the status in the year they registered, or had gross income of no more than GEL 50,000 in the previous year. Small business status and fixed tax both require registration as an individual entrepreneur; micro business status does not.
Moving up is more than a change of rate. The 1% is charged on Georgian-source income and leaves out salary and 12 named income types, among them rent, interest, dividends and gains on property, which stay under the general rules.
The filing rhythm changes too: one annual return becomes a return and a payment every month, due by the 15th, and a month left unfiled does not count as a zero return.
Which regime an activity actually falls into decides a whole year of tax, and that is the question David Sisvadze answers in a written opinion on your own facts. Some activities settle it for you: neither micro business nor small business status reaches work taxed under the fixed tax.
How you get the status
The application is made on the same form as for small business status, Annex 1 to the Ministry of Finance instruction, and it is filed with the tax authority. It can be filed whether or not you are already on tax registration, and registration as an individual entrepreneur is not part of it.
The tax authority considers the application and, if it grants it, issues a micro business certificate on the Annex 2 form within a reasonable time of receiving it. The status runs from the date stated in the application, which may not be earlier than the date the application was registered with the tax authority, and that date is recorded in the certificate. The certificate carries into later reporting periods unless the status is revoked.
The tax authority may also grant micro business status on its own initiative, on the information it already holds, and hand the certificate over without any application at all.
Filing, records and the VAT that still applies
A micro business holder has no monthly filing duty of any kind. The instruction imposes one return, the ordinary annual income tax return, and rules out advance payments. The Code sets it before 1 April of the following year, and the Revenue Service states 31 March as the last day to file it and to pay.
Record keeping is light too. Tax documents are kept for 3 years from the end of the calendar year they belong to, and there is no cash register duty unless the Government names the activity or the municipality.
The 0% is an income tax rate, not an exemption from everything. A micro business is not a tax agent when it pays for services it receives, but it does charge VAT under the reverse charge rules on services received from a non-resident, at the 18% VAT rate.
Buy a software subscription, a design job or advice from a supplier established outside Georgia and the reverse charge falls on you as the customer. It applies although a micro business cannot be registered for VAT at all.
When micro business status ends
The instruction lists 7 grounds on which micro business status is revoked: your own application, an inventory count finding stock above GEL 45,000, carrying out a prohibited activity, having a hired employee, an obligation to register for VAT arising, gross income in the calendar year passing GEL 30,000, and the holder's death.
A prohibited activity costs GEL 500 on top of the status. The GEL 45,000 figure is the balance of stock established by an inventory count carried out by the tax authority, 1 of the 5 current tax control measures it may use against micro and small business holders. The moment of measurement is that count, not a year end.
Passing GEL 30,000 or taking on staff starts a 15-day clock, and Order No 999 sets what each choice costs. Apply for small business status inside those 15 days and the 1% starts on the day of the excess or of the hiring, leaving everything earned before it under the micro business rules. Apply later and the 1% runs from the date of the application, with income from 1 January up to it taxed under the general rules.
Never apply at all and the status is revoked outright. The whole of that calendar year's income, not only the part earned after the breach, is then taxed under the general rules at 20%, on gross income less allowable deductions, and it goes on the annual return.
Say you cross GEL 30,000 on 20 June and apply for small business status on 10 July, 20 days after the excess. The 1% runs from 10 July, and everything you earned from 1 January up to that date is taxed under the general rules at 20% rather than at 0%.
Apply on 30 June instead, 10 days after the excess, and the 1% runs from 20 June, with the income before it left under the micro business rules. The same 15 days run from the day you take on an employee.
Frequently asked questions
Can I hire employees with micro business status?
No. Working without hired labour is a condition of holding the status, and taking someone on is a ground for revoking it. Family members working in the business are not treated as hired. From the day you take someone on, you have 15 days to apply for small business status.
What happens if I go over GEL 30,000?
The status ends. Apply for small business status within 15 days of the excess and the 1% covers you from the day you passed the limit. Apply after those 15 days and it starts only on the day you applied, so everything banked since 1 January falls under the general rules instead. Never apply at all, and the general rules at 20% take the whole calendar year.
Do I need to register as an individual entrepreneur for micro business status?
No. Micro business status is the one regime that does not require it, and the application can be filed whether or not you are already on tax registration. Small business status and fixed tax both do require that registration.
Can a micro business sell goods?
Not goods you bought in to resell. Trade is on the excluded list, and the exclusion lifts only where the purchased goods are processed before they are supplied. Making and selling your own output falls outside it, and the 25 activities in Annex 1 are not subject to the GEL 30,000 limit when the work is personal and the sale is retail.
Does a micro business file monthly declarations?
No. There is one return a year, the annual income tax return, due by 31 March, and no advance payments. The monthly return due by the 15th belongs to small business status, which is what a micro business moves into after passing the limit.
Does a micro business need a cash register?
No, unless the Government names the activity or the municipality. Small business status is different: the holder records cash receipts from customers on a cash register, and 3 cash register fines in a calendar year cancel the status from the start of that year.
Do I pay VAT as a micro business?
Not as a registered VAT payer, because the status cannot be granted to one and an obligation to register for VAT revokes it. You do pay the 18% reverse charge on services bought from a non-resident supplier. Registration for VAT is mandatory once taxable supplies cross GEL 100,000 within any 12 consecutive calendar months.
Is micro business status open to foreign nationals?
Yes. Neither Article 84 of the Tax Code nor the Ministry of Finance instruction sets a condition of Georgian tax residency, citizenship, a residence permit or days spent in the country. What decides it is the activity, the GEL 30,000 limit and the absence of hired labour.