Small Business Status in Georgia: Who Qualifies and How to Apply

Georgia offers one of the most favorable tax regimes for small businesses in the region: Small Business Status (SBS). Under this regime, qualifying businesses pay just 1% tax on gross revenue instead of the standard 20% corporate income tax. For freelancers and small business owners, this can mean significant savings.

To qualify for Small Business Status, your annual gross income must not exceed 500,000 GEL. You must be registered as an Individual Entrepreneur (IE), and your business activity must not fall into the excluded categories, which include certain regulated professions and activities requiring specific licenses.

The application process is handled through the Revenue Service portal (rs.ge). You submit a request for SBS, provide your business details, and the Revenue Service reviews your eligibility. Approval typically takes a few business days.

However, there are common mistakes that lead to rejection or, worse, retroactive revocation of the status. The most frequent is exceeding the revenue threshold without notifying the Revenue Service. If your annual revenue crosses 500,000 GEL, you are automatically moved to the standard tax regime -- and you may owe back taxes at the higher rate.

Another common issue is combining SBS with activities that are not permitted under this regime. If even a portion of your revenue comes from an excluded activity, your entire SBS status may be at risk.

Our recommendation: before applying, have a tax professional review your full situation. The 1% rate is attractive, but only if you genuinely qualify and can maintain compliance throughout the year. EFS Group has helped hundreds of entrepreneurs navigate this process -- and we catch the issues that most people miss until it is too late.