How to Get Only 1% Tax: Understanding Georgia’s Small Business Status

Many entrepreneurs and freelancers dream of finding a way to minimize their tax burden and keep more of their hard-earned money. In Georgia, this dream can become a reality through the Small Business Status, which allows eligible individuals and businesses to pay as little as 1% tax on their income. This tax regime is specifically designed for small business owners, entrepreneurs, and freelancers who operate under a certain revenue threshold. In this article, we will explore how you can qualify for Georgia’s Small Business Status and benefit from the 1% tax regime.

What Is Small Business Status in Georgia?

The Small Business Status is a special tax regime offered by the Georgian government that allows qualifying businesses and individuals to pay just 1% tax on their turnover, making it one of the most favorable tax environments in the world for small businesses. This regime is ideal for freelancers, consultants, and small business owners who want to reduce their tax liabilities without complicated accounting procedures.

Key features include:

• 1% Tax on Turnover: Instead of paying standard income tax rates, businesses under Small Business Status pay just 1% of their total revenue.
• Revenue Threshold: To qualify, your annual turnover must not exceed 500,000 GEL. If your revenue exceeds this limit, the tax rate will increase, and you may lose your Small Business Status.

Who Qualifies for the 1% Tax Regime?

To benefit from Georgia’s Small Business Status, you must meet several conditions:

1. Operate as a Sole Entrepreneur: This tax regime is available to individual entrepreneurs rather than larger companies. If you are a freelancer or run a small business independently, you likely qualify.
2. Turnover Limits: Your annual turnover must be under 500,000 GEL (approximately $185,000 USD). If you exceed this limit, you will no longer be eligible for the 1% tax rate.
3. Type of Business: Certain types of businesses may not qualify for this tax regime, such as those involved in regulated sectors (e.g., banking, gambling, or certain financial activities). At Georgia Business and Residential Law, we help clients assess whether their business fits within the eligible categories.

How We Can Help

At Georgia Business and Residential Law, we specialize in helping entrepreneurs and small business owners navigate Georgia’s tax system. Our expert team ensures you meet all the eligibility requirements for Small Business Status, and we handle the application process on your behalf. Additionally, we provide ongoing tax advice to help you stay compliant with Georgia’s tax laws and avoid exceeding the turnover limits that could lead to a higher tax rate.

Why Choose Georgia for Low Taxes?

Georgia’s Small Business Status is just one of many reasons why the country has become a hub for entrepreneurs and freelancers looking to minimize their tax burden. Other benefits include:

• No Corporate Tax on Retained Earnings: Georgia’s tax system only taxes profits distributed to shareholders, meaning reinvested profits are not subject to tax.
• Territorial Tax System: Only income earned within Georgia is subject to Georgian taxes, making it ideal for entrepreneurs with international clients.