Georgia keeps taxation short: six national taxes cover almost everyone, and most of the rates are flat rather than tiered. What causes confusion is not the headline number. It is that a single word - "income" - resolves to four completely different rates depending on how you are registered, and that "capital gains" is 0% far more often than the guides suggest, provided you can show the right facts. Here is the whole system in one place: every rate, the 0% cases that are real rather than marketing, and who ends up paying what.
The six taxes Georgia actually charges
Everything else in this guide is detail sitting under one of these six lines.
| Tax | Standard rate | Who it applies to |
|---|---|---|
| Personal income tax | 20% | Employees and ordinary business income |
| Small Business Status | 1% (3% above 500,000 GEL) | Individual Entrepreneurs holding the status |
| Micro Business Status | 0% | Individual Entrepreneurs under 30,000 GEL turnover |
| Corporate income tax | 15% | LLCs, only on distributed profit |
| VAT | 18% | Businesses over 100,000 GEL turnover in any rolling 12 months |
| Dividend tax | 5% | Withheld at source on distributions |
Capital gains and property tax sit outside this table because neither is a single rate - both depend on what is being taxed and for how long it has been held, which is why each gets its own section below. Import duty and excise apply only if you move physical goods across the border, which is a separate topic entirely.
Personal income tax: the 20% everything else is measured against
Georgia's Tax Code sets a flat rate of 20% on a natural person's taxable income, with no brackets and no progressive steps. That is Article 81 of the Tax Code of Georgia, and it is the rate every other regime on this page is a deliberate alternative to. An employee has 20% withheld from salary. A sole trader with no special status pays 20% on business income, with deductions for documented business expenses.
The less obvious part is who it reaches. A resident natural person is nominally taxed on worldwide income, but the Tax Code separately exempts income that is not Georgian-source, so the practical effect for most residents is territorial: foreign-source income is not taxed here at all. A non-resident is taxed only on Georgian-source income from the outset. Whether you count as resident turns on the 183-day test, which our tax residency guide works through in full - and residency and this tax exposure are two separate questions worth keeping apart.
Individual Entrepreneurs actually pay one of three rates
This is where most confusion starts, because "Individual Entrepreneur" describes the legal form, not the tax rate, and the form comes with three genuinely different outcomes.
- Ordinary IE, no special status. 20% on business income, same as an employee, with expense deductions available.
- Small Business Status. 1% of gross turnover up to 500,000 GEL a year, rising to 3% above that. No expense deductions - the trade-off for the low rate is that costs do not reduce the bill.
- Micro Business Status. 0% on turnover under 30,000 GEL, with no employees permitted.
Registering an IE does not put you into either preferential regime automatically; both are separate applications at the Revenue Service on top of the base registration. We cover the mechanics, the prohibited activities and the turnover math in 1% tax in Georgia, and the tighter conditions for the 0% band in our micro business status guide. If you are choosing between an IE and a company structure from the outset, our Small Business Status service starts with an eligibility check before anything is filed.
Capital gains tax, and when it is actually 0%
Capital gains are not a separate tax in Georgia - they are taxed under the personal income tax rules, at a different rate to ordinary income, and the exemptions are set out article by article in the Tax Code rather than as a single "capital gains is 0%" line. Getting the specific holding period wrong is the single most common error we see in other guides.
The general rule: surplus income from selling a residential apartment or house (with its attached land) or a vehicle is taxed at 5%. Everything else follows the exemptions below, which come from Article 82 of the Tax Code rather than from the 20% general rate.
| What is sold | Taxed at | 0% when |
|---|---|---|
| Apartment or house, with attached land | 5% | Owned for more than 2 years |
| Vehicle | 5% | Owned for more than 6 months after title registration |
| Other property (land, business interests, movable assets) | 20% as ordinary income if short-held | Owned more than 2 years and not used in economic activity |
| Negotiable securities | 0% | Always, regardless of how long they were held |
| Gains that are not Georgian-source | 0% | Always, for a resident individual |
| Gifts or inheritance from close family | 0% | Unlimited for first and second line heirs; up to 150,000 GEL for third and fourth line |
Almost every English-language summary applies a single "two years and you are exempt" rule to real estate, vehicles and everything else alike. The Tax Code does not say that. A vehicle is exempt after six months of ownership from title registration, not two years - a much shorter window that works in most sellers' favour, and one that gets flattened into the two-year figure by guides that never checked the actual article.
The "not used in economic activity" condition on the general two-year exemption is worth reading carefully too: holding shares purely to collect dividends, or property purely to collect rent as a residential landlord, is not treated as economic activity for this purpose, so the exemption still applies. Actively running a business through the asset - an office you trade out of, for instance - is what disqualifies it.
Corporate income tax: 15%, but only when it leaves the company
An LLC's profit is not taxed as it is earned. Georgia adopted the Estonian model in 2017: profit tax is charged at 15% only when profit is distributed, as a dividend or through a handful of transactions the Tax Code treats as equivalent to a distribution, such as non-business expenses or free transfers of value. Money kept in the company and reinvested is not taxed at all until it is eventually paid out. Banks, credit unions, microfinance organisations and other lenders are the exception, taxed at 20% instead of 15% since 2023.
This is the structural reason an LLC beats Small Business Status once a business is genuinely reinvesting rather than drawing cash out every month, and it is covered in full, including how distribution is defined and what does not count as one, in corporate income tax in Georgia.
VAT: 18% above the threshold, and reverse charge catches people below it
VAT registration becomes mandatory once a business's taxable turnover passes 100,000 GEL in any rolling 12-month period - a separate, much lower threshold than the 500,000 GEL Small Business Status cap, and one that arrives first for most growing businesses. Once registered, the standard rate is 18%.
The part that surprises people below the threshold is reverse charge: buying a service from outside Georgia, such as software subscriptions or a foreign contractor, makes you liable to declare and pay 18% VAT on that purchase even though you are not VAT registered yourself. It is one of the most commonly missed obligations among new Individual Entrepreneurs. The full mechanics, including how VAT-registered businesses reclaim input VAT, live in VAT in Georgia.
Dividend tax and the other withholding taxes
Dividends paid by a resident company are taxed at 5% at source, whether the recipient is a Georgian individual, a foreign individual or a foreign company. Article 130 of the Tax Code sets that rate and also carves out the cases where it does not apply: dividends paid between Georgian companies are not taxed again, and dividends sourced from negotiable securities are exempt entirely.
Interest and royalties carry their own rates. Interest is generally withheld at 5%. Royalties paid to a resident individual who is not VAT registered are taxed at 20%, but the rate drops to 5% for payments to non-residents. Payments of interest, royalties or other Georgian-source income to a recipient registered in a jurisdiction treated as having preferential tax treatment are withheld at 15% instead - a deliberate penalty rate aimed at routing income through low-tax jurisdictions. A tax treaty can reduce several of these rates further; Georgia's double tax treaty network covers more than 55 countries. The dedicated dividend tax guide goes through each case in full.
Property tax and the smaller taxes most businesses never touch
Property tax exists but reaches a narrower group than the taxes above. An individual only becomes liable once their family's annual income exceeds a threshold set by the Ministry of Finance, and the rate then differs by income band rather than being a single figure - low-income families pay a small fraction of a percent of the property's market value, higher earners pay closer to 1%. Enterprises pay up to 1% of the average net book value of taxable property annually, under separate rules for leased assets.
Neither of these usually changes a decision about how to structure a business, which is why they get a mention here rather than a dedicated post, but they are real obligations if you own Georgian real estate personally or through a company.
Who pays what: a taxpayer-by-taxpayer summary
The six taxes above land differently depending on who you are, which is the question most people actually have.
| You are | What you pay |
|---|---|
| An employee | 20% income tax, withheld by your employer |
| An ordinary Individual Entrepreneur | 20% on business income, expenses deductible |
| An IE with Small Business Status | 1% of turnover up to 500,000 GEL, 3% above it |
| An IE with Micro Business Status | 0% under 30,000 GEL turnover |
| An LLC | 15% on profit you distribute, 0% on profit you keep in the business |
| Anyone selling personal property | 5% or 0%, depending on what it is and how long you held it |
| A non-resident with Georgian-source income | Withholding at source - 5% on most dividends and interest, or 20% income tax if operating through a permanent establishment |
VAT and property tax sit on top of whichever row applies to you, once the relevant threshold is crossed.
How Georgia compares
Georgia's flat 20% personal rate and 15% corporate rate, charged only on distribution, sit well below what most Western European tax systems charge. Progressive personal systems across the EU commonly reach a top marginal rate above 40%, and standard corporate tax is usually charged on profit as it is earned rather than deferred until distribution - Georgia's Estonian-style deferral is the more unusual feature of the two, not the headline percentage. That gap is exactly why people ask whether the whole system is too good to be true, which is a fair question and one we answer plainly, rather than defensively, in is Georgia a tax haven.
Filing and paying: the part that is the same for everyone
Whatever combination of these taxes applies to you, the administrative rhythm does not change. Every registered business - IE or LLC, Small Business Status or not - files a declaration with the Revenue Service by the 15th of each month, including months with no income at all. Missing a zero declaration is one of the most common ways a new business picks up a penalty it never saw coming.
Everything runs through rs.ge, the Revenue Service's own portal, which is in Georgian throughout and is where every one of the rates above eventually gets declared and paid.
Most of our clients hand the whole cycle to us rather than learn the portal, which is really an accounting question once you get past the rates - our accounting in Georgia guide covers what a normal month looks like and where people go wrong, and every important date across the year is collected in Georgia's tax deadlines.
Tell us your income sources, your residency position and what you are trying to achieve, and we will tell you honestly which of these rates actually applies to you and what the total bill looks like.
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Key takeaways
- Georgia charges six main taxes: 20% personal income tax, 1%/3% Small Business Status, 0% Micro Business, 15% corporate tax on distribution only, 18% VAT, and 5% dividend withholding.
- Capital gains are taxed under the income tax rules, not as a separate tax, and several assets qualify for 0% - real estate after 2 years, vehicles after just 6 months, negotiable securities always.
- Which of the four "income" rates applies to you depends entirely on how you are registered, not on what work you do.
- VAT registration is mandatory at 100,000 GEL of turnover, well before the 500,000 GEL Small Business Status ceiling, and reverse charge can apply even below that.
- Monthly declarations are due by the 15th for everyone, including zero-income months.
Frequently asked questions
What is the standard tax rate in Georgia?
Personal income tax is a flat 20%, and corporate income tax is 15% but charged only when a company distributes profit rather than when it is earned. Neither is progressive - there are no brackets to climb.
Do I pay Georgian tax on income I earn outside Georgia?
Generally no, if you are a Georgian tax resident. The Tax Code specifically exempts income of a resident natural person that is not Georgian-source, which makes the practical effect territorial even though the general rule nominally taxes worldwide income. Non-residents are taxed only on Georgian-source income regardless.
Is capital gains tax really 0% in Georgia?
In several common cases, yes. Real estate held more than 2 years, a vehicle held more than 6 months, negotiable securities at any time, and gifts or inheritance from close relatives are all exempt. Shorter holding periods on real estate or vehicles are taxed at 5%, and other short-held assets fall back to the 20% ordinary rate.
How much tax does an LLC pay in Georgia?
15% on profit when it is distributed to shareholders, and 0% on profit that stays in the company. There is also a 5% dividend withholding on top of the 15% when a distribution actually happens, so a full payout costs close to 20% all-in.
When do I have to register for VAT, and what is the rate?
Registration becomes mandatory once your taxable turnover passes 100,000 GEL in any rolling 12-month period. The rate is 18%. You can also register voluntarily before then, and reverse charge on services bought from abroad can apply even if you are nowhere near the threshold.
How much dividend tax will I actually pay?
5%, withheld at source when a resident company pays a dividend. It does not apply again if the dividend passes between two Georgian companies, and it does not apply to dividends sourced from negotiable securities.
Do I owe tax if I sell my car within the first year of owning it?
Possibly, at 5% on the profit, not the 20% general rate - but only if you have owned it for 6 months or less from title registration. Past 6 months, the gain is exempt. This is shorter than the 2-year rule that applies to real estate, and guides that apply one rule to both are wrong.
What is the difference between an ordinary Individual Entrepreneur and Small Business Status?
An ordinary IE pays 20% on business income with expenses deductible. Small Business Status is a separate application that drops the rate to 1% of turnover up to 500,000 GEL, with no expense deductions at all. The IE registration does not include the status automatically - you have to apply for it.
Is Georgia a tax haven?
No, not in the sense the term is normally used - it is a published, statutory tax system with real filing obligations and international information exchange, not an undisclosed or shell-only regime. The rates are simply low and, for corporate tax, deferred rather than immediate. We go through the honest version of this question, including where it does look aggressive from outside, in our dedicated post on the subject.
When are Georgian taxes actually due?
Monthly declarations are due by the 15th of the following month for almost every registered business, including months with zero income. Annual obligations sit on top of that and vary by structure - our tax deadlines guide collects every date in one place.
Do non-residents pay tax in Georgia?
Only on Georgian-source income, taxed either through withholding at source - 5% on most dividends and interest paid to them - or as ordinary income tax if they operate through a permanent establishment here. A non-resident with no Georgian-source income and no permanent establishment has no Georgian tax exposure at all.