Significant Change:

Income from Construction Services Provided by Small Business Status Entrepreneurs Will No Longer Be Taxed at 1%
January 16, 2025 by
Significant Change:
Audit company TMC

Starting from February 1, 2025, an amendment to the “Special Taxation Regimes” resolution (№415, dated December 29, 2010, by the Government of Georgia) will come into effect. This change concerns income from construction services provided by individuals with small business status.

Key Changes:

  • Income from construction services will no longer be taxed at the 1% rate.
  • Income from construction services will not be included in the calculation of the GEL 500,000 threshold.
  • Taxation will follow the general rule, meaning annual taxable income (profit) will be taxed at a 20% rate.

Who Does the Change Affect?

  • The change applies to income where the recipient of the service is a business entity, organization, or an entrepreneurial individual.
  • If the recipient of the service is a non-entrepreneurial individual, this income will not be subject to the mentioned change.

Obligations for Small Entrepreneurs:

  • Entrepreneurs with small business status must submit a declaration for income received from construction services by April 1 of the following tax year.
  • The same deadline applies for paying the relevant tax (at a 20% rate), taking into account the entrepreneur’s current tax obligations.
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