Georgia's Small Business Threshold Explained

The Small Business Status threshold is the single number that decides whether the regime keeps working for you. This article explains what happens as turnover approaches it, what happens when it is exceeded, and how to plan for a year where the answer is uncertain.

The threshold applies to turnover, not profit

Small Business Status is measured against gross turnover in a calendar year, before costs. A business with 480,000 GEL of revenue and 400,000 GEL of subcontractor costs is measured on the 480,000, not on what is left.

This is why margin matters more than headline revenue when deciding whether the regime is genuinely favourable for your business.

What happens if you exceed it

Exceeding the threshold does not simply mean paying a slightly higher rate on the excess. It changes your status, and a higher rate can apply to income earned once the limit is passed, with the status itself at risk for the following period.

The practical consequence is that an unplanned strong year can be materially more expensive than a planned one.

• Track cumulative turnover monthly, not annually in arrears.
• Model the outcome before accepting a large contract late in the year.
• Consider whether contract timing legitimately falls into the following period.
• Review whether a different Georgian structure fits better from the start.

VAT is a separate threshold

VAT registration has its own, much lower threshold and its own rules. It is entirely possible to remain inside Small Business Status while also having a VAT registration obligation, and people routinely miss this because they are watching only one number.

Planning around the limit

If your business is growing towards the threshold, the right time to review the structure is a year before you hit it, not the month after. That review considers whether a Georgian company, a mixed structure, or simply accepting the higher rate is the cleanest answer for your situation.

Frequently asked

Is the threshold measured per calendar year?

It is measured against turnover in the relevant tax year. Because that resets, timing of invoicing and receipts near year end can matter — but timing must reflect genuine commercial reality, not paperwork.

What if I exceed it once and then drop back down?

Exceeding the limit affects your status and may require reapplication or a change in treatment. It is not automatically restored simply because the following year is quieter.