Taxes for Freelancers in Georgia 2025: Complete Guide

Georgia has become a popular destination for freelancers, digital nomads, and remote workers thanks to its favorable tax regime. With the right setup, you can pay as little as 1% tax on your freelance income. This guide explains everything you need to know about freelancer taxes in Georgia in 2025.

Tax Options for Freelancers in Georgia

As a freelancer in Georgia, you have several tax regimes to choose from. The right choice depends on your income level, type of work, and client base.

Option 1: Small Business Status (1% Tax)

This is the most popular option for freelancers. Under Small Business Status, you pay only 1% tax on gross revenue — no deductions, no complicated calculations.

Requirements:

• Annual revenue under 500,000 GEL (~$185,000 USD)
• Must be registered as Individual Entrepreneur
• Cannot have employees (with some exceptions)
• Must apply for the status at the Revenue Service

How it works:

If you earn 10,000 GEL in a month, you simply pay 100 GEL in tax. That's it. No income tax, no social contributions, no VAT (unless you exceed the VAT threshold).

Option 2: Micro Business Status (0% Tax)

Yes, zero percent tax exists in Georgia. Micro Business Status is available for freelancers with very low income.

Requirements:

• Annual revenue under 30,000 GEL (~$11,000 USD)
• Must be a natural person (not a legal entity)
• Cannot have employees
• Limited to specific activities

While attractive, the 30,000 GEL limit makes this impractical for most serious freelancers.

Option 3: Standard Individual Entrepreneur (20% Tax)

Without special status, Individual Entrepreneurs pay 20% income tax on net profit (revenue minus documented expenses). This is rarely the best option for freelancers since most have minimal business expenses.

Option 4: Virtual Zone Person — VZP (0% on IT Exports)

If you're an IT professional or provide digital services to clients outside Georgia, VZP status offers 0% corporate tax on export income.

Requirements:

• Must be an LLC (not IE)
• Activity must be IT-related (software development, web design, digital marketing, etc.)
• Services must be delivered to clients outside Georgia
• 5% tax when you withdraw profits as dividends

VZP is ideal for developers, designers, and IT consultants earning significant income from foreign clients.

How to Register as a Freelancer in Georgia

Step 1: Get Your ID Number

Foreign nationals need to obtain a Georgian ID number (Personal Number) from the Public Service Hall. This takes about 1 day and costs around 50 GEL.

Step 2: Register as Individual Entrepreneur

Visit the Public Service Hall or register online through the Revenue Service portal. Registration is free and takes 1-2 days.

Step 3: Apply for Small Business Status

Submit an application through the Revenue Service (rs.ge). Approval typically takes 2-3 business days.

Step 4: Open a Bank Account

Georgian banks like Bank of Georgia and TBC Bank offer business accounts for IEs. You can receive international payments and withdraw in local currency.

Monthly Obligations

Once registered, your ongoing tax obligations are minimal:

Monthly:

• File a revenue declaration by the 15th of the following month
• Pay 1% tax on the previous month's revenue
• Keep records of income received

Annually:

• No annual tax return required for Small Business Status
• Monitor your revenue to stay under the 500,000 GEL threshold

VAT Considerations

VAT registration becomes mandatory when your revenue exceeds 100,000 GEL in any 12-month period. Once registered:

• You must charge 18% VAT on services to Georgian clients
• Export services (to clients outside Georgia) are zero-rated
• You can reclaim VAT on business purchases

Most freelancers working with international clients stay under the VAT threshold or register voluntarily to reclaim input VAT.

Comparison Table

Common Mistakes to Avoid

1. Not registering at all: Some freelancers assume they can operate "under the radar." Georgia has information exchange agreements with many countries, and the Revenue Service is increasingly sophisticated.

2. Missing the revenue threshold: If you exceed 500,000 GEL, you automatically lose Small Business Status and owe 20% tax on all income above the threshold.

3. Ignoring VAT obligations: Crossing the 100,000 GEL threshold without registering for VAT can result in penalties and back-taxes.

4. Poor record-keeping: Even with 1% tax, you need to document all income for potential audits.

Need Help Getting Started?

Setting up as a freelancer in Georgia is straightforward, but choosing the right structure and ensuring compliance can save you thousands in taxes. Our team has helped hundreds of freelancers establish their presence in Georgia.