New Tax Regime Imposes Min Tax Burden of 1% for Small Businesses

About 120,000 entrepreneurs will start utilizing the new tax regime that came into force on 1 July 2018. Deputy Minister of Finance and Head of Revenue Service, Giorgi Tabuashvili, held a briefing on this matter. The new tax regime imposes a minimum tax burden (1%) for small businesses. With changes in law and regulation, a new definition is given to small business owners: entrepreneurs whose yearly company income amounts to GEL 500,000 instead of GEL 100,000. 

As mentioned at the briefing, a small business status is to be given to an entrepreneurial person. The entrepreneur's physical personal registration (for example, in case of performing artistic activities) is carried out by the Revenue Service, and if a person is entitled to the status of individual entrepreneur in accordance with the Law on Entrepreneurs, they are obliged to register as an individual entrepreneur before granting the status of small business.

The new tax reform ensures transparency in the sector and is an important stimulus for further development of start-ups in Georgia.  Moreover, it ensures the tax administration to minimize costs through a simplified tax accounting for entrepreneurs. As a result, the share of small business in GDP will significantly increase. These changes bring positive consequences for the private and the public sector, encouraging entrepreneurs to enter the market, expand operations and seek further financing. 

Tabuashvili stated at the briefing that an information campaign on small business status and new regime of taxation will be held throughout Georgia and the relevant schedule will be published on the website of the Revenue Service.

By Anna Zhvania

03 July 2018 14:06