On 6 February 2026, Order N38 of the Minister of Finance of Georgia was published, introducing amendments to the Instruction on the “Application of Special Tax Regimes” approved by Order N999. The amendments affect individuals holding Micro Business, Small Business, and Fixed Taxpayer status and clarify taxation rules, status cancellation procedures, and compliance obligations.
Micro Business Status – Taxation Upon Cancellation
Under the previous regulation, if a person with Micro Business status exceeded the annual revenue threshold of GEL 30,000 or began employing personnel, they could apply for Small Business status. However, the deadline for applying and the taxation treatment of income earned before obtaining Small Business status were not clearly defined.
The amendment now clarifies how income earned from the beginning of the year until the date of status cancellation will be taxed. If the individual exceeds the GEL 30,000 threshold or begins employing personnel and applies for Small Business status within 15 calendar days, the Micro Business status is cancelled from the date of exceeding the threshold or hiring personnel and Small Business status is granted from the same date. Income earned prior to obtaining Small Business status remains taxed under the Micro Business regime and therefore remains non-taxable.
If the individual applies after the 15-day deadline, Small Business status is granted from the date of application and income earned from the beginning of the calendar year until the granting of Small Business status is taxed under the general regime at 20%. If the revenue has not exceeded GEL 30,000 and the person voluntarily applies for Small Business status, the status is granted from the application date and income earned before that date remains taxed under the Micro Business regime. The amendment therefore introduces a strict 15-day compliance rule and removes previous ambiguity.
The document retention obligation for Micro Business taxpayers has also been reduced from six years to three years,counted from the end of the calendar year relevant for determining the tax liability.
Small Business Status – Effective Date of 1% Taxation
An important amendment concerns the effective date of Small Business status. Previously, Small Business status became effective from the first day of the month following the application. Under the new rules, Small Business status becomes effective from the date of application ,meaning the 1% tax rate applies to income received from the application date rather than from the following month.
Re-Granting of Small Business Status
If a person’s Small Business status is cancelled, the individual may reapply only from the next tax year following the year of cancellation. Reinstatement within the same calendar year is no longer permitted. If a person voluntarily requests cancellation before the end of the year, the status remains cancelled from the first day of the month following the month of application.
Small Business Monthly Declaration Obligation
The amendment clarifies that failure to submit the monthly personal income tax declaration of a Small Business taxpayer does not qualify as submission of a zero declaration. Submission of the declaration remains mandatory even where no tax is payable.
Fixed Taxpayer Status
To obtain Fixed Taxpayer status, an individual must now be registered as an Individual Entrepreneur. If the registration as an Individual Entrepreneur is cancelled, the Fixed Taxpayer status will also be automatically revoked.
Entry Into Force
The amendments will enter into force 30 days after publication (publication date: 6 February 2026). Overall, the changes introduce greater legal certainty, stricter procedural deadlines, and immediate effectiveness of Small Business status. Taxpayers operating under special regimes should review their compliance procedures to avoid unintended taxation under the general 20% regime.
How Eurofast Can Help
Eurofast can assist taxpayers in reviewing their status under the amended rules, ensuring timely transitions between special tax regimes, and maintaining compliance with updated declaration and documentation requirements. For further information please contact Ms. Irina Lopatina, Country Executive at the Eurofast office in Tbilisi, Georgia at [email protected].