Plan contractor hiring in Georgia

Engage a Georgian contractor under a service agreement that identifies the supplier, the work and the fee, with their business and tax status established before the first payment. An individual entrepreneur can contract in their own name and apply separately for small-business status. That status is restricted by activity, so a quoted low tax rate needs more than a registration extract behind it. Services supplied by a Georgia-resident contractor to a foreign customer can produce Georgian-source income even when the same services fall outside Georgian VAT. Record the supplier’s status and the actual service description as separate onboarding decisions.

Sources: Legislative Herald, Civil Code of Georgia, Legislative Herald, Law on Entrepreneurs, Legislative Herald, Tax Code of Georgia

If the line is crossed

For work performed in Georgia, an employment finding brings employee protections into the relationship, including paid leave and payment of remuneration at least monthly. Salary also falls outside the small-business income-tax regime, with the ordinary 20% individual income-tax rate applying unless an exemption applies. For salary expenses not attributed to a Georgian permanent establishment, the employee may undertake tax computation, reporting and payment under the Minister of Finance’s prescribed procedure. That route is optional, and the nonresident employer is released from withholding only if it is used. Resolve the applicable payroll tax arrangements before continuing payments after an employment finding.

Sources: Legislative Herald, Labour Code of Georgia, Legislative Herald, Tax Code of Georgia

მცირე ბიზნესის სერტიფიკატი

Small-business certificate

The small-business certificate establishes that the tax authority has granted the supplier that status. Under the amended special-regime order, status generally begins on the application date, subject to its stated exception. Ask the contractor for the certificate when onboarding relies on small-business taxation, and match it to the person and activity in the service agreement. The contractor owns the monthly return and payment, due by the fifteenth day of the following month; a missing return is not treated as a zero return. Procurement needs evidence of status, but does not need to turn the contractor’s monthly filing into a recurring invoice-approval requirement. After cancellation, a new application is possible only from the next tax year.

Issued by: Revenue Service to the eligible entrepreneur natural person; the contractor can provide a copy to the customer.

Timing: Request during onboarding when relying on this status, and refresh the record when the supplier reports a change.

Sources: Legislative Herald, Tax Code of Georgia, Legislative Herald, 2026 amendment to Ministerial Order No. 999

A foreign B2B service invoice can fall outside Georgian VAT when the general place-of-supply rule locates the service at the business customer abroad. That rule follows the taxable customer’s establishment, or the fixed establishment receiving the service. Confirm the customer’s business identity, address and receiving establishment with the contractor before accepting the tax treatment. Service-specific rules can change the answer, including rules for immovable-property work and admission to events; use-and-enjoyment provisions also require attention where relevant. A foreign billing address alone cannot settle every service category. Ask for a correction if the invoice’s service description does not match the basis used to locate the supply.

Sources: Legislative Herald, Tax Code of Georgia

What an invoice has to show

• Content of an issued Georgian tax source document

  When a Georgian tax source document is issued, it must identify the parties and contain the date, services supplied and their value. The Code calls for matching copies kept by the parties, and a small-business contractor must preserve source documents they issue or receive. These content rules do not establish a universal tax-invoice requirement for every foreign service payment. Agree a service description that connects the billed work to the contract, especially where the activity affects small-business eligibility or VAT location. If the supplier corrects the document, retain the matching corrected version so both parties’ records refer to the same transaction.

  Sources: Legislative Herald, Tax Code of Georgia

For a contract for work governed by Georgian law, payment follows completion unless the parties agree instalments. Where the work must be delivered, payment is due upon acceptance. Put the intended billing stages, deliverables and acceptance process into the contract before work begins, particularly if accounts payable expects periodic invoices. The Civil Code can also treat work as accepted when the client fails to accept it within the period fixed by the contractor. An internal approval process should therefore have an owner who can accept the work or raise a concrete objection promptly.

Sources: Legislative Herald, Civil Code of Georgia

When invoices are settled

The agreed payment deadline supplies the clock for a Georgian-law monetary obligation; missing a fixed performance date can put the customer in default. Late-payment interest follows the parties’ agreement, and the contractor may claim damages caused by delay. These consequences concern the payment obligation, so finance should work back from the due date when arranging release of funds. State the due date and any agreed interest term clearly, and give invoice disputes a decision deadline. Responsibility for a delay matters: the Code excludes default where nonperformance arises from circumstances not caused by the debtor’s fault.

Sources: Legislative Herald, Civil Code of Georgia

The currency on the invoice

A service fee governed by Georgian law may be denominated in a foreign currency unless a legal prohibition applies. State the agreed currency in the contract and use it consistently on the invoice, with any intended conversion agreed before payment. The contractor’s Georgian tax calculation is separate: a taxable foreign-currency transaction is translated into lari using the National Bank of Georgia’s official rate for the transaction day, where one exists. That tax conversion does not by itself require the customer to rewrite the contractual fee in lari. Confirm the currency the receiving account will accept and who bears any conversion cost.

Sources: Legislative Herald, Civil Code of Georgia, Legislative Herald, Tax Code of Georgia

Pricing consulting work on an assumed 1% tax rate

Consulting is among the activities excluded from small-business status, alongside named professional activities such as legal and audit work; personnel provision is also excluded. A certificate therefore needs to be checked against what the contractor will actually supply. Conducting a prohibited activity can revoke the status from the beginning of the calendar year, which is a different consequence from the higher rate triggered by turnover. Have the contractor resolve activity eligibility before a fee is priced around 1% taxation. Renaming advisory work as a project deliverable leaves the underlying service and its tax question unchanged.

Sources: Government of Georgia, Ordinance 415 on special tax regimes, Legislative Herald, Tax Code of Georgia

Treating a tax number as proof of the withholding exception

Ordinary taxpayer registration does not establish the supplier exclusions used in Georgia’s service-fee withholding rule. Registered individual entrepreneurs fall outside that trigger, and the rule also expressly excludes specified recipients, including small-business and VAT-registered natural persons. Match the actual status to the person being paid before deciding to pay without that deduction. If the practitioner has no relevant registration or excluded status, resolve the foreign payer’s withholding and registration position before payment. For an ordinary resident contractor outside the special regime, income tax is generally calculated on taxable income after permitted deductions; the 1% small-business calculation cannot be assumed from a tax number alone.

Sources: Legislative Herald, Tax Code of Georgia

Adding employer pension contributions to every resident contractor’s invoice

A nonresident customer should not automatically add Georgian employer pension contributions to an independent contractor’s fee. The funded-pension law excludes nonresidents from its employer definition, while self-employed participation is voluntary at entry and carries contribution duties once the person joins. The personal scope also matters: Georgian citizens and foreign or stateless persons with permanent residence permits are covered, so Georgian tax residence alone does not answer the pension question. Ask the contractor to account for any contribution they owe within their own financial arrangements. Keep that decision separate from whether the working relationship actually qualifies as employment.

Sources: Legislative Herald, Law on Funded Pension