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IE WITH 1% TAX FOR FREELANCERS
Georgia is a promising and attractive country for foreign freelancers, especially from the IT field. Lack of strict regulations, loyal tax policy, fast and simple registration process attracted businessmen from CIS countries and Europe to open IE with low status in Georgia.
The main advantage of Georgia is the ability to reduce tax costs due to the fact that if your annual turnover is less than 30,000 lari (9,000 dollars) per year, the rate will be 0%. But business owners with small status must file income and expense declarations on a monthly basis.
- If your annual turnover is from 30,000 to 500,000 lari (~ 145,000 dollars), then you need to pay 1% of the turnover and submit monthly income and expense declarations, respectively, and pay monthly taxes.
- When your annual turnover is above GEL 500,000, the turnover tax is 3% in the first year. If your turnover exceeds the GEL 1,000,000 threshold for 2 years, you lose the small business tax rate and pay 20% on your net profit.
VAT registration is required if your VAT-taxable turnover exceeds 100,000 lari if you work in the Georgian market. The procedure for taxing business with VAT is specific, based on the place of provision of services/sale of goods.
If you have already arrived in Georgia, then with your personal presence, all stages (from registration at the House of Justice to the issuance of a multicurrency bank card) will take no more than 3 working days.
If you are in another country, the procedure for remote registration by proxy (from the House of Justice to issuing a multicurrency bank card and sending DHL anywhere in the world) will take no more than 5 business days.
WHO CAN GET THE STATUS?
The tax service has limited the list of activities for individual entrepreneurs with a low status. Allowed to take advantage of the tax credit:
- IT developers;
- Online marketers;
- Persons conducting online trading;
- Family business;
- Private hotels;
- Hostels and guesthouses;
- Taxi drivers;
- Tourist guides.
Those who provide any kind of financial and consulting services. That is, such income will be taxed according to the usual system and you will have to pay 20% of the net profit annually. Therefore, it is so important to get a free consultation from a specialist before registering an individual entrepreneur.