This Georgia tax guide covers the rules in force for the 2026 tax year. Georgia (the Caucasus republic, capital Tbilisi — not the US state) runs a territorial system: residents pay nothing on genuinely foreign-source income, while local income is taxed at a flat 20%. Individual entrepreneurs can register for Small Business Status and pay just 1% on turnover up to GEL 500,000 (≈ $188,000). Corporate profits are taxed only when distributed (Estonian model, 15%), there is no social security, no wealth tax and no inheritance tax. Tax residence is reached at 183 days.
Introduction
Georgia sits at the crossroads of Eastern Europe and Western Asia, on the eastern shore of the Black Sea, bordered by Russia to the north, Turkey and Armenia to the south, and Azerbaijan to the east. It is a unitary parliamentary republic of roughly 3.7 million people, with the lari (GEL) as its currency and Georgian as the official language; Russian and increasingly English are widely used in business. The country combines a Mediterranean-to-alpine climate, a very low cost of living by European standards, a fast and largely digital public administration, and a civil-law legal system. It is not an EU member: Georgia was granted EU candidate status in December 2023, but the accession process has since stalled amid domestic political turmoil. It maintains a Deep and Comprehensive Free Trade Area with the EU and free-trade access to China, Turkey and the CIS.
For internationally-mobile investors, entrepreneurs and remote earners, this Georgia tax guide matters because the country pairs very low headline rates with a territorial base. The headline draws are the flat 20% personal income tax, the 1% turnover regime for small businesses, the 0% micro-business band, the deferred 15% corporate tax that is only triggered on distribution, the absence of social security, wealth, inheritance and gift taxes, and the exemption of foreign-source income for residents. Easy company formation, cheap banking onboarding (though tightening) and a straightforward 183-day residency test round out the appeal — with the political and geopolitical caveats discussed below.
Direct Taxes
Georgia taxes resident individuals on Georgian-source income only — foreign-source income received by a resident is exempt. There is no progressive scale: employment and most personal income face a single flat rate. Companies are resident if incorporated or effectively managed in Georgia and are, in principle, taxed on worldwide income — but under the Estonian-style corporate tax the charge is deferred until profit is distributed. The signature concepts investors should understand are the territorial exemption for individuals and the distribution-based corporate tax, both of which can produce very low effective rates.
Personal income tax (2026)
| Chargeable income (GEL) | Rate |
|---|---|
| All Georgian-source personal income (flat) | 20% |
| Foreign-source income of a resident individual | 0% (exempt) |
| Capital gain on sale of a car or residential property + land | 5% |
| Residential rental income (no deductions taken) | 5% |
Georgia applies a flat 20% rate to salary and most Georgian-source personal income, withheld at source by employers. There are no tax-free brackets in the ordinary sense, but two features sharply reduce the effective burden: foreign-source income is not taxed at all for residents, and specific categories — capital gains on a personal car or home, and residential rental income — are taxed at a reduced 5%. A temporary fixed-rate regime for short-stay (Airbnb-style) accommodation operated from 1 January 2023 but expired on 1 January 2026; such income now follows the normal rules — confirm current treatment before relying on it.
Corporate income tax
| Item | Rate |
|---|---|
| Standard corporate income tax (on distributed profit) | 15% |
| Banks, credit unions, microfinance and loan providers (from 1 Jan 2023) | 20% |
| Retained/reinvested profit | 0% (deferred until distribution) |
Since 2017 Georgia has used the Estonian model: retained profits are not taxed, and the flat 15% only applies to distributed dividends, non-business costs, free-of-charge transfers and over-limit representative expenses. Dividends distributed between Georgian companies, and dividends received from most foreign companies, are not subject to corporate tax — making Georgia attractive for holding structures. Commercial banks and other financial institutions pay a higher 20% rate and remain on the traditional annual-profit basis. There are no local or regional profit taxes, and Georgia is not currently within the OECD Pillar Two minimum-tax net for most taxpayers.
Social security and health contributions
| Contribution | Employee | Employer | Self-employed |
|---|---|---|---|
| Social security | None | None | None |
| Mandatory pension (under 60/55) | 2% | 2% | 4% |
| State pension co-contribution | — | — | 0–2% (income-based) |
Georgia has no social security contributions — a major saving versus most of Europe. The only mandatory payroll charge is the funded pension scheme introduced in 2019: the employer withholds 2% of salary and adds a further 2%, while the state tops up by 2% (salary/income under GEL 24,000 / ≈ $9,000), 1% (GEL 24,000–60,000 / ≈ $9,000–22,600) or nil above GEL 60,000 (≈ $22,600). The self-employed contribute 4% of their own income. Individuals who were already 60 (55 for women) when the law took effect, and the self-employed, can opt out. There is no separate health levy.
Indirect Taxes
Georgia’s main indirect tax is a VAT modelled broadly on the EU VAT system, supplemented by excise duties and import (customs) tax. There are no stamp or transfer taxes.
Value-added tax (VAT)
| Rate | Applies to (examples) |
|---|---|
| 18% (standard) | Most goods and services supplied in Georgia |
| 0% (zero) | Exports, international transport, and certain supplies |
| Exempt | Financial services, certain medical and education services, oil & gas operations |
The standard VAT rate is 18%. Registration is mandatory once taxable turnover exceeds GEL 100,000 (≈ $37,600) in any continuous 12-month period; voluntary registration is available below that. Exports and international transport are zero-rated (with input-tax recovery), while financial, medical and education services are exempt (without recovery). Since 2021, non-resident providers of digital services to Georgian consumers must register and remit VAT, and reverse-charge VAT applies to services bought from non-resident suppliers by Georgian VAT payers.
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Excise duties | On alcohol, tobacco, fuel/oil distillates, natural gas and vehicles; rates from GEL 0.08 to GEL 800 per unit (≈ $0.03 to $300). Exports exempt. |
| Customs (import) tax | Three bands: 0%, 5% and 12% depending on product; most goods 0%. Cars taxed by engine volume plus age. |
| Transfer taxes | None |
| Stamp duty | None |
Excise is levied by quantity (volume, weight, alcohol content) or, for tobacco, partly on price. Customs tax has only three rates and most imports enter at 0% thanks to Georgia’s free-trade agreements. There are no stamp or property-transfer taxes, which keeps real-estate and share transactions cheap.
Other Taxes Worth Knowing
| Tax | Georgia treatment |
|---|---|
| Capital gains tax | No separate CGT. Gains on a personal car or home + land: 5%. Other gains generally taxed as income at 20%, but foreign-source gains of residents are exempt. |
| Dividends (resident individual) | 5% final withholding |
| Interest (resident individual) | 5% final withholding |
| Royalties | 5% withholding |
| Rental income (residential, no deductions) | 5% |
| Wealth / net worth tax | None |
| Inheritance / estate tax | None |
| Gift tax | No standalone gift tax; gifts from close relatives are exempt, other gifts may fall under income tax — confirm individual treatment |
| Immovable property tax (annual) | Up to 1% — only if the household’s annual income exceeds GEL 40,000 (≈ $15,000) |
The capital-gains base is deliberately narrow. There is no general CGT; the everyday cases — selling your own car or home — are taxed at just 5%, and a main residence/car held for more than two years can be fully exempt. Dividends, interest and royalties paid to residents suffer a 5% final withholding, after which no further tax is due. Critically, because the system is territorial, foreign dividends, foreign interest and foreign capital gains received by a Georgian resident are generally not taxed at all. The annual immovable-property tax bites only on relatively higher-income households (over GEL 40,000 (≈ $15,000) of family income) and is capped at 1% of value.
Disadvantages & Risks
The headline risk is political and geopolitical. Georgia is politically divided: the ruling Georgian Dream party’s 2024 “foreign agents” law, contested elections and large street protests have frozen the EU accession path and strained relations with Western partners. The country also shares a border with Russia and has two Russian-backed breakaway regions (Abkhazia and South Ossetia), leaving a persistent security overhang that can affect currency stability, investor sentiment and insurance costs. It is a small, open economy heavily exposed to remittances, tourism and transit trade, so external shocks transmit quickly.
On the financial side, the banking sector has tightened sharply: non-resident account opening is now slower and more selective, with enhanced AML and source-of-funds checks, partly to avoid secondary-sanctions exposure. Georgia is not on the EU list of non-cooperative jurisdictions or the OECD blacklist, and it is a member of the Council of Europe’s MONEYVAL — but it remains under scrutiny, and reputational perception of the Caucasus can complicate banking elsewhere. Substance matters: the 1% and territorial benefits assume genuine local activity and, for foreigners, increasingly a valid work permit, so purely artificial setups are vulnerable. Finally, the territorial exemption depends on income being genuinely foreign-source — mischaracterised local income can be reassessed at 20%.
Strategy & Ideal Profile
The structures that work best pair a Georgian individual entrepreneur (IE) with Small Business Status for active personal services, or a Georgian LLC under the Estonian-model corporate tax for trading and holding. The IE route gives a solo freelancer or consultant a 1% turnover tax up to GEL 500,000 (≈ $188,000) (0% under the micro-business band below GEL 30,000 (≈ $11,300) with no employees). The LLC route lets an operating or holding company reinvest profits at 0%, paying 15% only when it distributes — and intra-Georgian and most foreign dividends flow in free of corporate tax, which suits a holding-plus-operating structure.
Who it suits: company owners who reinvest rather than extract cash benefit from the deferred 15%; freelancers and digital nomads earning under GEL 500,000 (≈ $188,000) capture the 1% regime; investors and dividend earners with foreign portfolios benefit from the territorial exemption on foreign income; and retirees living on foreign pensions or investment income can often pay little or nothing locally. Practically, you become a tax resident by spending 183 days in any rolling 12-month period (a separate High-Net-Worth-Individual residency route exists — confirm current criteria), after which foreign-source income is exempt.
Who it does not suit: employees on Georgian payrolls (flat 20% with no shelter), high earners whose income is genuinely Georgian-source, and anyone needing EU passporting, deep capital markets or a top-tier banking reputation. The 1% regime is capped (3% above GEL 500,000 (≈ $188,000), status lost after two breaches), foreigners now generally need a work permit before earning under it, and the territorial benefit only holds for income that is truly foreign-source — so the advantage erodes for locally-generated profits.
FAQ
Is Georgia a tax haven?
Not in the classic sense — Georgia has real taxes (20% income, 15% corporate, 18% VAT) and is not on the EU or OECD blacklists. But its territorial system, 1% small-business regime and absence of social security, wealth and inheritance taxes make it one of the most tax-efficient onshore jurisdictions for the right profile.
What is the corporate tax rate in Georgia in 2026?
A flat 15%, but charged on the Estonian model — only when profit is distributed. Retained and reinvested profits are effectively taxed at 0%. Banks and financial institutions pay 20% on the traditional annual-profit basis.
How does the 1% small business regime work?
A registered individual entrepreneur with annual turnover below GEL 500,000 (≈ $188,000) can obtain Small Business Status and pay 1% on gross turnover. Turnover above GEL 500,000 (≈ $188,000) is taxed at 3%, and the status is revoked after two consecutive years over the cap. Below GEL 30,000 (≈ $11,300) with no employees, micro-business status gives 0%.
What is the 183-day rule?
You become a Georgian tax resident if you are physically present in Georgia for 183 days or more in any continuous 12-month period ending in the tax year. Residence is assessed each tax period independently. A separate High-Net-Worth-Individual route can grant residency without the day-count — confirm the current asset/income thresholds.
Does Georgia tax capital gains?
There is no separate capital gains tax. Gains on selling your own car or home (with land) are taxed at 5%, and a main residence or car held over two years can be fully exempt. Foreign-source capital gains of residents are exempt under the territorial system; other gains are treated as income at 20%.
Is there inheritance or wealth tax in Georgia?
No. Georgia levies no inheritance, estate or net-wealth tax. There is no standalone gift tax either, though gifts to non-relatives may fall under income tax — confirm the individual treatment for large gifts.
How are dividends taxed for a non-resident or foreign investor?
Dividends paid from a Georgian company suffer a 5% withholding (often reduced under one of Georgia’s many tax treaties). Dividends a Georgian resident receives from abroad are generally not taxed in Georgia at all, thanks to the territorial exemption.
Sources
All figures should be checked against the official Georgian government sources below.
- Georgia Revenue Service (rs.ge) — preferential tax regimes, small business / micro business status, VAT and income tax administration — https://www.rs.ge/PersonsPreferentialTax-en
- Ministry of Finance of Georgia (mof.ge) — Tax and Customs Policy, Tax and Customs Codes, double-taxation treaties — https://www.mof.ge/en/page/sagadasaxado_sistema
- Legislative Herald of Georgia (matsne.gov.ge) — Tax Code of Georgia (official consolidated text, English) — https://matsne.gov.ge/en/document/view/1043717
Last verified: 7 June 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Georgian tax adviser before acting.
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