VAT for individual entrepreneurs in Georgia: the 100,000 GEL threshold and what counts towards it

An individual entrepreneur in Georgia has to register for VAT once taxable supplies in Georgia pass 100,000 GEL in any 12 consecutive months. The application is due within two working days, and 18% VAT applies from the supply that crossed the line. Small business status doesn't exempt you from VAT, but you keep it after registering. Services sold to foreign companies don't count towards the threshold, which is why a freelancer with clients abroad rarely reaches it.

How the 100,000 GEL threshold is counted

The threshold is the total of your taxable supplies over 12 consecutive calendar months, without the VAT itself (Tax Code, articles 164 and 165). The calendar year plays no part. Each month you look back over the last twelve, so the window moves with the date.

Say you design for Georgian companies and have been billing them 9,000 GEL a month since November 2025.

Month	Payment, GEL	Total for the last 12 months
November 2025	9,000	9,000
March 2026	9,000	45,000
September 2026	9,000	99,000
October 2026	9,000	108,000

October takes you over. VAT is due on the October payment itself, and you have two working days to apply for registration. Had an American company bought the same design work, none of these payments would have counted.

Which income counts

Only supplies that are taxable in Georgia count. Article 162¹ of the Tax Code decides where a service is supplied, and for a freelancer the answer depends on who the client is.

Client	Place of supply	Counts towards the threshold
Company or entrepreneur in Georgia	Georgia	yes
Private individual in Georgia	Georgia	yes
Foreign company or entrepreneur	client's country	no
Private individual abroad: software, websites, hosting, online learning, advertising, data processing	client's country	no
Private individual abroad: other services	Georgia	yes

Business clients are simple: the service is supplied where the client is established. For private clients the default runs the other way, and the place of supply is the provider's country, Georgia. Paragraph 14 of article 162¹ lists the exceptions: electronic services, transfer of intellectual property rights, advertising, consulting, legal, accounting and engineering services, and data processing. Bespoke design or writing for a private client abroad isn't named there, so that income may have to be counted. If many of your clients are private individuals abroad, talk to an accountant while you are still well below 100,000 GEL.

Two more rules. VAT-exempt supplies don't count, apart from a few cases in article 165(7) such as exports of goods. And income under the 1% status is not excluded: the exclusion in article 165(7¹) covers only fixed-tax payers.

What to do once you cross it

You have two working days from the day you cross the threshold to apply for VAT registration (article 165(1)). You become a VAT payer from the supply that took you over, including that supply (article 165(2)). An entrepreneur with small business status also takes an inventory at that point (article 92).

The registration procedure is set by an order of the Minister of Finance, and the Revenue Service accepts the application. The information centre at 2 299 299 can tell you whether to file it through your rs.ge account or at a service centre.

Once registered, you add 18% to your prices for Georgian clients. The VAT period is a calendar month, and the return and payment are due by the 15th of the following month (articles 167 and 168), the same date as the 1% declaration.

Registering late is expensive. VAT is still charged from the moment you crossed the threshold, and the unregistered period adds a penalty of 5% of taxable supplies (article 282). Unpaid tax accrues interest of 0.05% a day (article 272).

Reverse-charge VAT on foreign services

An individual entrepreneur registered in Georgia pays VAT on behalf of a foreign provider when buying services supplied in Georgia: Google or Meta ads, software subscriptions, work from freelancers abroad. This is the reverse charge under article 161, and it applies without VAT registration (article 165²). The only exceptions are private individuals with no business activity and free industrial zone enterprises.

The rate is the same 18% of the amount payable, with foreign currency converted at the NBG rate for the date of the transaction. Say an ad campaign cost $200 and the NBG rate on the payment date was 2.70. That's 540 GEL, and 97.20 GEL of reverse-charge VAT. The NBG rate calculator gives the rate for any date. The tax is due by the 15th of the following month (article 168(4)); advisers describe a separate monthly reverse-charge return in the rs.ge cabinet.

These purchases don't count towards the 100,000 GEL threshold, which only looks at your sales. Until you register for VAT you can't recover reverse-charge VAT. After registration you can credit it (articles 175 and 176).

VAT and the 1% status

VAT registration doesn't cancel small business status, because it isn't one of the grounds in article 89. Micro business status is different: it ends when you register for VAT (article 85). The two regimes have separate limits, counted in different ways.

	1% status limit	VAT threshold
Amount	500,000 GEL	100,000 GEL
Period	calendar year	any 12 consecutive months
What counts	all business income	VAT-taxable supplies in Georgia, excluding VAT
Foreign business clients	count	don't count
When exceeded	3% from that month	register within 2 working days, 18% VAT

MyIncome.ge keeps your 1% turnover in lari month by month, and those months add up to the 12-month total. For the VAT threshold, keep only the supplies taxable in Georgia: payments from Georgian clients and private individuals.

You can also register voluntarily at any time and become a VAT payer from the date of the application (article 165(6)). Deregistration is allowed once taxable supplies over the last 12 months are 100,000 GEL or less and at least a year has passed since registration. It takes effect on the 1st of the following month (article 165¹).

This is general information, not tax advice. Rules change, so check with rs.ge or an accountant before you register.