Georgia’s Tax Rates Explained: What Each Percentage Actually Applies To
RIGHTSIDE INSIGHTS · GEORGIA TAX RATES · 2026
A percentage is not useful until you know its base. One percent of gross receipts, five percent of a gain and fifteen percent of distributed profit answer very different questions.
The question to ask before the rate
When someone says “Georgia taxes businesses at 1%”, ask: which taxpayer, which income and on what amount? Georgia has distinct systems for an individual employee, an entrepreneur with small-business status, an ordinary company and a company with a special IT status. Even one person can have several forms of income, each requiring a different calculation.
| Headline rate | Broad tax base | Who or what it may concern |
|---|---|---|
| 1% | Qualifying gross receipts | Individual entrepreneur granted small-business status; 3% can apply after the GEL 500,000 annual threshold is crossed. |
| 20% | Taxable personal income or gross salary, depending on rule | Ordinary income and employment. |
| 5% | Qualifying residential rent or eligible property gain | Specific individual income; not a general property-tax rate. |
| 15% | Taxable distributed profit under the statutory gross-up method | Ordinary Georgian corporate profit tax on distributions and deemed distributions. |
| 18% | Taxable supply value | VAT, including relevant reverse charge, subject to place-of-supply and exemptions. |
| 5% / 5% | Eligible distributed profit / eligible salary | International Company status under separate qualifying conditions. |
A company that reinvests profits may have no ordinary distributed-profit tax on those retained profits at that moment. That does not make the company a blanket “zero-tax company”: deemed distributions, nonbusiness expenses, payroll, VAT and other taxes still need consideration. Conversely, 1% small-business tax is on eligible gross business income; a freelancer usually cannot deduct ordinary costs before computing that particular tax.
Payments to people have their own rules
Salary is generally subject to 20% personal income tax, with funded-pension contributions assessed separately where applicable. Dividends paid by an ordinary Georgian company generally bring 5% withholding after the company’s distributed-profit tax analysis. Interest and royalties have their own withholding rates depending on the recipient and source. Payments to nonresidents can trigger different rates, treaty relief or a reverse VAT analysis. No single “withholding tax rate” works for every payment.
Property and land are not one tax
Corporate property tax can be calculated by reference to the taxable value of assets within statutory limits. An individual’s property tax depends in part on family income and the kind of asset. Land tax has a different base and local variation. These taxes should not be confused with 5% income tax on qualifying residential rental income or gains. Rental 5% treatment has procedural and use conditions; sales can be exempt after two years or taxed differently when part of a business.
VAT is a separate test
The standard VAT rate is 18%, but the question begins with whether the supply is in scope and where it is treated as supplied. The general registration threshold is GEL 100,000 of VAT-taxable transactions over any consecutive 12 months, subject to special rules. An entrepreneur can owe small-business income tax and VAT simultaneously. Foreign clients, digital services and imported services require a place-of-supply review rather than a quick guess from an invoice address.
Five comparisons that prevent expensive errors
- Gross receipts versus profit: 1% small business is not the same base as 15% corporate distributed profit.
- Gain versus sale price: the 5% apartment-sale rate concerns a qualifying gain, not the entire price.
- Salary versus service fee: changing an invoice label does not turn employment into entrepreneurship.
- Tax rate versus total cost: pension, VAT and compliance may change the real result.
- Rate versus eligibility: special regimes require status, activity and supporting evidence.
The older comparison table that inspired this guide is useful as a map, not as a quote for a transaction. Rates, bases, exemptions and reporting periods must be verified in the current Tax Code and applicable implementing rules before a contract or tax return is signed.
General information as of October 2026. The result for a particular taxpayer depends on the current law, supporting documents and the facts of the activity.