Small Business Status with 1% taxation
Here are the activities and restrictions that are not eligible for the favourable tax treatment of small business status in Georgia:
- Activities that require special licensing
- Production of excise goods
- Advocatory services and law firms
- Tax and legal consulting services
- Medical services
- Architectural services
- Auditory and notary services
- Beauty centers
- Car repair services
- Gambling activities
- Foreign exchange transactions
These restrictions are in place to ensure compliance with specific regulations and to maintain fairness in the tax system. It's important to be aware of these limitations when considering small business status in Georgia.
Small Business status and VAT
Individuals who qualify as small businesses in Tbilisi, Georgia enjoy the advantage of a reduced personal income tax rate of 1% instead of the standard 20% rate. However, it's important to understand that being classified as a small business does not exempt individuals from paying Value Added Tax (VAT). Small businesses are still subject to VAT regulations, and VAT will be applicable once their turnover exceeds the threshold of 100,000 GEL within a 12-month period.
It's worth noting that if an individual provides services to foreign customers, there is a possibility that VAT may not apply. However, this is assessed on a case-by-case basis in consultation with our team. We can provide guidance and assistance in determining whether VAT is applicable based on your specific circumstances. Our knowledgeable team is here to support you and ensure that you are compliant with VAT regulations while maximizing the benefits of small business status in Tbilisi, Georgia.