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.