Quick answer
Georgia has no personal allowance and few classic deductions in 2026. Its benefits come from low rates and exemptions instead: foreign-source income is generally exempt for individuals, property and cars held over two years can be sold tax-free, dividends and interest pay 5%, and individual entrepreneurs can pay 1% on turnover up to GEL 500,000.
Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad
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Find my savings →You're used to tax systems full of allowances and deductions, and Georgia looks almost empty. That's on purpose: the flat 20% rate replaces most reliefs. After reading, you'll know what you actually pay on each kind of income and which legal exemptions can cut your bill.
Georgia personal deductions and benefits in 2026: the key figures
| Item | 2026 rule |
|---|---|
| Personal income tax | Flat 20%, no tax-free personal allowance |
| Employee pension contribution | 2% of gross salary, deducted before income tax |
| Dividends from Georgian companies | 5% final withholding |
| Interest from Georgian payers | 5% final withholding |
| Residential rental income | Optional 5% on gross rent |
| Property, land or car held over 2 years | Gain exempt for individuals |
| Foreign-source income of residents | Generally exempt |
| Small business status (individual entrepreneur) | 1% of turnover up to GEL 500,000 |
Is this guide for you?
Read on if you…
- are Georgian tax resident or plan to be;
- earn a mix of salary, freelance income, rent or investment income;
- want to know which exemptions apply before you sell an asset.
Probably not your case if you…
- only want to know whether you're resident – see our Georgia tax residency rules;
- run a Georgian company and want the corporate side – see business expenses in Georgia.
Which deductions can you claim in Georgia?
Honestly? Very few. Georgia replaced most deductions with a low, flat rate. Employees cannot deduct commuting, home office or family costs from salary.
Pension contributions
The main deduction for employees is the funded pension. You pay 2% of gross salary, your employer adds 2% and the state adds up to 2%. Your 2% is deducted before the 20% income tax is calculated.
So on GEL 5,000 gross a month, you pay GEL 100 pension and GEL 980 income tax. You take home GEL 3,920.
Exemptions for specific groups
Some people get a yearly tax-free amount. These include people with disabilities and certain other protected groups.
Business costs for entrepreneurs
If you are an individual entrepreneur (IE) – a registered sole trader – on the general regime, you pay 20% on profit, after documented business costs. On small business status, you pay 1% of turnover instead and cannot deduct costs. See business expenses in Georgia for what counts.
How much do you really pay on each type of income?
| Income type | Resident individual | Non-resident individual |
|---|---|---|
| Salary for work in Georgia | 20% after 2% pension | 20% |
| Freelance income, IE on small business status | 1% of turnover | 1% if registered as IE |
| Dividends from Georgian companies | 5% final | 5%, may be cut by treaty |
| Interest from Georgian payers | 5% final | 5%, may be cut by treaty |
| Shares and funds (gains) | Georgian shares: 20%; foreign shares: generally exempt as foreign-source | 20% on Georgian shares only |
| Crypto (private investor) | Generally exempt as foreign-source | Generally not taxed in Georgia |
| Residential rent from Georgian property | 5% on gross rent, or 20% on net | Same |
| Georgian property sold | 0% if held over 2 years, otherwise 20% | Same |
| Foreign rent, dividends, interest | Generally exempt | Not taxed in Georgia |
Holding periods that matter
The two-year rule is the big one. Sell a flat, a house with land or a private car after more than two years of ownership and the gain is generally exempt. Sell earlier and the gain is taxed at 20%.
For listed securities, some gains on shares traded on a recognised stock exchange may be exempt.
How can you pay less, legally?
Use the foreign-source exemption properly
Passive income from abroad – foreign dividends, foreign rent, foreign bond interest – is generally exempt for resident individuals. Keep investments in a foreign brokerage account and you usually pay nothing in Georgia. Your former country's exit rules may still apply, so check them first.
Choose the right status for freelance work
Work done in Georgia is usually Georgian-source. Registering as an IE with small business status brings the rate down from 20% to 1% of turnover. Our guide to tax incentives for expats and digital nomads in Georgia covers eligibility.
Here's the catch: some activities, such as consulting under certain codes, may be excluded.
Opt for the 5% rental regime
If you let a residential flat, you can pay 5% on gross rent instead of 20% on net profit. It suits landlords with few costs.
Time your property sales
Waiting until day 731 can turn a 20% tax into zero. Check your purchase date on the Public Registry extract.
What about leaving Georgia?
Georgia has no exit tax for individuals. You can leave with unrealised gains and pay nothing on departure. Georgian-source income stays taxable after you go. Our guide to ceasing Georgian tax residency covers the steps.
Example – Sofia, Spanish data analyst
Sofia is Georgian resident in 2026. She earns GEL 180,000 as an IE with small business status: GEL 1,800 tax at 1%. She receives GEL 25,000 of dividends from her foreign ETFs: exempt as foreign-source. She lets a Tbilisi flat for GEL 18,000 a year and pays 5%: GEL 900. She sells a flat bought in 2023 for a GEL 60,000 gain: exempt after two years. Total Georgian tax: GEL 2,700 on GEL 283,000 of income.
Sofia used four exemptions in one year. You might be missing one.
Find out what you could save in Georgia.
Find my savings →Common mistakes (and what they cost)
- Treating Georgian work as foreign income → 20% tax plus penalties on income you thought was exempt.
- Selling property one month early → a 20% tax on a gain that would have been exempt.
- Forgetting to register rent → you lose access to the 5% rate and may owe 20% plus late-payment interest.
- Deducting costs on small business status → not allowed; the 1% is on gross turnover.
- Ignoring your old country → exit taxes or extended residence rules there can wipe out Georgian savings.
Frequently asked questions
Is there a tax-free allowance in Georgia?
No. Georgia applies its flat 20% rate from the first lari of taxable income. There is no general personal allowance. Specific groups, such as people with disabilities, get a yearly exempt amount. Most savings come from exemptions and special regimes rather than allowances.
Can I deduct my children or spouse in Georgia?
No. Georgian income tax is individual and has no family deductions or joint filing. Each person is taxed on their own income. Family-related benefits are delivered through social programmes rather than through the income tax system.
Are gifts and inheritances taxed in Georgia?
Gifts and inheritances from close family members are generally exempt. Gifts from other people may be taxable as income above a small annual amount. Georgia has no separate inheritance or gift tax. Check the current threshold before accepting a large gift from a non-relative.
Do I pay tax on foreign pension income in Georgia?
A foreign pension paid to a Georgian resident is generally foreign-source and exempt in Georgia. Your former country may still tax it at source, depending on the treaty. Government pensions are often taxable only in the paying country.
Does the 1% regime apply to employees?
No. Small business status is for individual entrepreneurs only. If you are employed by a Georgian company, your salary is taxed at 20% after the 2% pension contribution. Converting employment into a contractor relationship must reflect reality, or the tax authority may reclassify it.
Related guides
- Tax incentives for expats and digital nomads in Georgia
- Specific taxes in Georgia
- Business expenses in Georgia
- Georgia tax residency rules
- Georgia tax landscape overview
- Personal tax deductions and benefits in Romania
- All country tax guides
Sources
- Revenue Service of Georgia
- Legislative Herald of Georgia – Tax Code of Georgia
- Ministry of Finance of Georgia
- Pension Agency of Georgia
- PwC Worldwide Tax Summaries – Georgia
This guide is general information, not personalised tax advice. See how we research and review.
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