Getting a Small Business Status (малый бизнес статус) in Georgia is one of the best tax optimization tools available, offering a preferential income tax rate of just 1%. However, many entrepreneurs run into compliance traps due to minor oversights.

To keep your 1% tax rate safe, keep these core rules in mind:

• Strict Income Limit: Your annual turnover must not exceed 500,000 GEL. If you cross this threshold for two consecutive years, the preferential status is revoked.
• Prohibited Activities: Certain fields—such as medical practices, legal services, financial brokerage, and IT consulting under specific conditions or trading in excisable goods—are legally barred from holding small business status. Always verify your exact activity code (NACE).
• Timely Declarations: Even if your revenue for the month was zero, you are legally required to submit your tax declaration by the 15th of the following month. Missing deadlines can lead to automated penalties or suspension of status.

Proper structuring from day one saves you from unexpected tax recalculations at the standard 20% rate. If you need help verifying your activity code or setting up monthly reporting, our team is always here to assist.