Georgia personal tax: source, residence and the right income category

Residence and source answer different questions

Article 34 generally tests 183 days in a continuous 12-calendar-month period ending in the relevant tax year and treats a qualifying individual as resident for the whole current year. This is not simply 183 days between January and December. The statute includes some absences connected with treatment, leisure, business trips or study, and excludes specified categories of presence. Keep a dated travel record rather than relying on the date of a residence card.

Residence determines the applicable framework; it does not make all income taxable. Article 82(1)(u) exempts a resident individual’s income, including gains, that is not Georgian-source. The next step is therefore to classify the income under Article 104. Document both the residence conclusion and the reason a particular receipt is exempt or taxable.

An overseas customer is not enough

Article 104 includes employment exercised in Georgia and relevant services actually performed here among Georgian-source income. Customer address, payment currency and bank location should not be used as shortcuts. A person writing code from Tbilisi for an overseas customer needs a services-source analysis before claiming a foreign-income exemption.

Contrast that with a resident individual receiving a dividend from a genuinely foreign enterprise: the payer and other Article 104 connections matter. If the person also directs that enterprise from Georgia, company residence and management need a separate review. An individually exempt receipt and the foreign company’s own Georgian exposure are different questions.

Ordinary income, rent and investment receipts

The ordinary individual rate is 20% of taxable income under Articles 80–81, with the relevant deductions and exemptions. It is not a progressive tax band table. Employment withholding, business income and asset gains have different collection and base rules. A summary of the headline rate should not be interpreted as 20% of every deposit entering a bank account.

Qualifying residential rent can be taxed at 5% where the owner takes no deductions and meets the conditions. Domestic dividends and covered interest generally have their own 5% withholding treatment; interest from a licensed financial institution has a statutory exemption subject to recipient conditions. Royalties paid to a resident individual are a separate category and should not be assigned the nonresident 5% royalty rate.

Small-business status: 1% is a conditional turnover regime

Articles 88–93 concern an individual entrepreneur who receives the relevant status and conducts eligible activity. Covered Georgian-source income is ordinarily taxed at 1%; salary and the income categories excluded from the regime remain separate. A company cannot simply elect to use this individual regime, and an employment relationship does not become eligible independent business merely by changing the invoice.

Under the ordinary threshold, exceeding GEL 500, 000 annual economic-activity income produces a 3% rate from the beginning of the threshold-crossing month through year-end. The code has a different GEL 700, 000 threshold for specified wine/agro-tourism operators. Exceeding the relevant threshold in each of two calendar years can lead to status revocation from the following year. Other violations have different consequences, including potentially retroactive loss of status.

An illustrative eligible entrepreneur with GEL 200, 000 of covered annual income at 1% has GEL 2, 000 tax under this regime. This does not quantify VAT, pension participation, taxes on excluded receipts or costs. A low-margin trader and a high-margin consultant with the same receipts therefore need different economic comparisons, and the consultant’s activity must first be eligible.

Selling assets: identify the asset, holding period and use

Article 82 distinguishes a residential home and attached land owned for more than two years, a vehicle owned for more than six months after registration, and other assets held over two years subject to economic-use restrictions. Mere holding of securities to receive dividends or interest is specifically addressed. These are conditions, not a universal capital-gains exemption.

If a residential/vehicle gain is taxable, Article 81 specifies 5%. Other disposals need their own income and source classification. A resident’s qualifying foreign-source gain may be exempt under Article 82(1)(u), but active dealing, business use and Georgian connections must be checked before using that conclusion. Retain purchase, improvement, registration and sale records.

Property tax changed in September 2026

Law 1874 of 30 September 2026 amended the annual property-tax rules and applies to property tax declarable in 2026. Taxable property other than land is exempt where the family’s prior-calendar-year income does not exceed GEL 100, 000. Above the exemption, the statutory rate range for taxable non-land property is 0.8%–1% of the prescribed prior-year-end market value. The older GEL 40, 000 threshold in the English code display should not be used.

Land is excluded from that income exemption and needs its own assessment. The Revenue Service’s 2 October notice gives 2 November 2026 for the applicable annual return and 16 November for payment; it also addresses cases where previous declarations can roll forward. For a relocating household, identify which relatives/income belong in the statutory family calculation rather than comparing the threshold only with one person’s salary.

Employee and employer pension costs are separate

The funded-pension law covers Georgian citizens and foreign/stateless persons with permanent residence, subject to participation and age/withdrawal provisions. A temporary foreign resident should not automatically be treated as an in-scope pension participant. For an employee participating in the scheme, the employee contributes 2% and the employer contributes another 2% of taxable salary. A participating self-employed person contributes 4%.

The state contributes 2% on the first GEL 24, 000 of annual income, 1% on the portion from GEL 24, 000 to GEL 60, 000 and nothing above that. GEL 60, 000 is the state-matching limit, not a ceiling that switches off employee and employer contributions. Income-tax withholding, pension deductions and take-home pay still need to be computed on the correct respective bases.

VAT is not included in the 1% income tax

The standard VAT rate is 18%. Under Article 165, the ordinary mandatory-registration test examines more than GEL 100, 000 of VAT-taxable supplies in any 12 consecutive calendar months, with an application within two business days of crossing the threshold. The threshold-crossing supply is included in the charging rule. The count is not automatically identical to all cash received by a small business.

First establish the VAT place of supply and the customer’s status. Article 162¹ generally differentiates B 2 B and B 2 C services and then lists exceptions. A service may be Georgian-source for income-tax purposes but have a different VAT place of supply; the two statutory tests must not be conflated. Imports, reverse charging and exempt supplies require their own review.

Returns, departure and a defensible file

Article 153 gives an annual 1 April filing deadline for covered individuals whose income was not taxed at source. Small-business returns and payments instead generally run to the 15 th of the following month under Article 93. The correct calendar depends on the actual categories; an exemption or a withholding should be documented rather than treated as permission to ignore every filing question.

An entrepreneur terminating economic activity has a specific 30-business-day return provision. General individual CFC and exit-tax classifications remain unresolved in this guide: absence of a confirmed rule is not a confirmed exemption. Before arrival or departure, coordinate Georgia’s source treatment with any tax claims retained by the other country.

Asset cost basis on arrival

A general immigration step-up to market value has not been verified. An exemption for a foreign-source disposal is not the same mechanism as raising acquisition cost. Georgian-source assets, later business use, a change of source and the destination on a future move can all make the original cost relevant.

Keep the original acquisition file and obtain contemporaneous arrival values for material holdings. The implementation analysis should identify which valuation is legally relevant for each asset and each country, instead of declaring the whole portfolio tax-free on the basis of residence alone.