Who does not qualify for the 1% status.
Small Business Status is not automatic. A government resolution excludes a list of activities, and the Revenue Service reads it broadly. We check your activity against it before anything is filed, and tell you in writing if it does not fit.
Activities excluded from Small Business Status
- Licensed or permit-based activities. Any activity that needs a licence or a permit to operate.
- Regulated professions. Medical, architectural, legal (advocacy), notarial and audit services.
- Consulting. Consulting activities, including tax consulting, are on the list. Management, business and marketing advice sit close to the line; how the activity is described and registered matters.
- Financial activities. Currency exchange operations and other financial intermediation.
- Gambling. Gambling and betting businesses.
- Staffing. Provision of personnel to other businesses.
- Excise goods. Production of excise goods such as alcohol, tobacco and fuel.
Source: Government of Georgia Resolution No. 415 on special taxation regimes, Annex 4 (matsne.gov.ge), and Andersen Georgia (September 2026). Checked 4 November 2026. The wording of the current consolidated version must be confirmed by Georgian counsel for your case.
Income that is never taxed at 1%
These income types do not end the status on their own, but they are taxed under their own rules, not at 1%:
- Rental income, capital gains, dividends, interest and royalties
- Gifts and inheritances
- Salary received under a labour contract
The turnover limit
The 1% rate applies to turnover up to GEL 500,000 in a calendar year. Above that, the excess is taxed at 3% for the rest of the year, and the status ends after two consecutive years above the limit.
Questions
I am a freelance consultant. Can I still apply?
Possibly, depending on what you actually do. Software development, design and content work are usually outside the list; advice-based work is the grey zone. We review your real activity with Georgian counsel before filing and tell you in writing if it does not qualify.
What happens if my activity is later found ineligible?
The Revenue Service can withdraw the status, generally from 1 January of that year, and the income is then taxed under the standard rules (20% personal income tax on net profit for an individual entrepreneur), with possible penalties.
What if part of my work is excluded?
Mixing an excluded activity with eligible work can put the whole status at risk. Separate structures or a different route may fit better; your written recommendation says which.
Does the 1% replace tax in my home country?
No. Small Business Status is a Georgian regime. Where you live and work decides where else you are taxed; a local tax adviser confirms it.
General information, not an individual tax or legal opinion. Eligibility is decided by the Revenue Service of Georgia.