Converting Foreign Income to GEL for Tax Purposes: Exchange Rate Rules for I.E.s
- Tinatin Tolordava
- 7 days ago
- 6 min read
Table of contents
Introduction
Why Exchange Rate Rules Matter
The Official Rule. Use the Revenue Service Exchange Rate
How to Find the Correct Exchange Rate
Which Date Should You Use. Invoice Date or Payment Date
What If the Payment Is Held by a Platform
Why Your Bank Rate and Your Tax Rate Are Different
Example. Full Walkthrough Using Real Numbers
Income Received Across Several Days
What Happens During an Audit
How Exchange Rate Rules Affect Tax Residency
What If Your Client Pays You in Crypto
Why Correct Conversion Protects Your Business
How Gegidze Helps I.E.s Stay Compliant
Frequently Asked Questions (FAQs)
Introduction
If you are an Individual Entrepreneur (IE) in Georgia with Small Business Status, most of your income probably comes from abroad. You invoice clients in USD, EUR, GBP, or sometimes even CHF or AED. The money lands in your Bank of Georgia or TBC Bank account. Everything looks straightforward until the moment you submit your monthly declaration to the Revenue Service Georgia.
The question hits every freelancer working with foreign clients.How do you convert your foreign income into GEL for tax purposes.Which exchange rate should you use.What happens if your bank conversion rate is different from the Revenue Service rate.
This guide gives you the full picture. Clear. SEO focused. Practical for anyone working with clients outside Georgia and paying the 1 percent turnover tax.
Why Exchange Rate Rules Matter
Your tax obligation is always calculated in Georgian lari (GEL). Even if every client pays you in USD or EUR, the Revenue Service expects your monthly declaration to show your turnover in GEL.
Using the wrong rate can create issues such as:
Incorrect monthly filings
Differences between bank transactions and tax declarations
Automatic red flags in the Revenue Service system
Penalties for underreported turnover
Delays when applying for Georgian tax residency
If you want your 1 percent status to stay safe, learning the correct conversion method is essential.
The Official Rule. Use the Revenue Service Exchange Rate
Georgia has a very simple rule for converting foreign income.You must use the official exchange rate published by the Revenue Service Georgia for the date when the income was received.
This is the only rate that counts for taxation.Not your bank rate.Not the rate used when you converted money into GEL.Not the mid-market rate shown online.
The Revenue Service publishes its official exchange rate every day. This is the rate used for your 1 percent tax calculation.
How to Find the Correct Exchange Rate
You find it directly in your Revenue Service e-Cabinet.Inside the declaration form, the system automatically shows the EUR to GEL or USD to GEL rate applicable for the chosen date.
This ensures accuracy and eliminates guesswork.If you try to use your bank conversion rate, the amount will not match and your declaration may be flagged.
Which Date Should You Use. Invoice Date or Payment Date
This is the second most common question.Georgia uses the date you actually received the income.
The invoice date does not matter.The day your client pays the invoice does.
Examples.
Your client pays you on the 10th, even though you invoiced on the 1st. You must use the exchange rate for the 10th.
You receive money at 23.59 on the 15th. The system will treat it as income received on the 15th.
A transfer arrives on a weekend. The Revenue Service system applies the rate for the previous working day.
The rule is simple. Always match the rate to the day the income actually arrived in your account.
What If the Payment Is Held by a Platform
Many freelancers use platforms like Upwork, Fiverr, Payoneer, Deel, or Wise.The same rule applies.
You must declare income on the date the money enters your possession. For example:
Upwork releases funds into your account on the 5th.
Payoneer receives your client payment on the 12th.
Wise shows the balance as available on the 3rd.
These dates are treated as the income receipt dates. Not the date the client pressed “pay.”
If you later transfer the money to the Bank of Georgia, that transfer does not affect the tax date. The tax date is the moment the money becomes available on your platform.
Why Your Bank Rate and Your Tax Rate Are Different
If you receive USD or EUR into a Georgian bank, the bank may convert it into GEL at a different rate.This is normal.
Your tax declaration is not affected by the bank’s commercial rate.Your tax is calculated only using the Revenue Service rate, even if the bank conversion is higher or lower.
This protects you from unpredictable bank spreads.Your tax burden stays consistent because the Revenue Service uses stable, official daily rates.
Example. Full Walkthrough Using Real Numbers
Let’s say your German client sends you 1,000 EUR.The payment lands in your Bank of Georgia account on the 10th of the month.
The Revenue Service EUR to GEL rate on that day is 2.85.
Your turnover for that month is:1,000 EUR x 2.85 = 2,850 GEL
Your tax for that month is:2,850 GEL x 1 percent = 28.50 GEL
Now imagine your bank converted the payment at 2.80.It does not matter.Your official turnover is still based on the Revenue Service rate of 2.85.
Income Received Across Several Days
If your clients pay you in multiple transactions, each entry must be converted separately using the rate for that specific day.
Example.
400 USD received on the 2nd
600 USD received on the 5th
1,200 USD on the 17th
Each amount must be converted at the Revenue Service rate for the date of receipt.You cannot merge the transactions and use one average exchange rate.
What Happens During an Audit
If the Revenue Service Georgia reviews your IE, they check three things closely:
Your bank statements
Your platform statements (Wise, Payoneer, Upwork, Deel)
Your declared turnover
They check that the declared GEL turnover matches the Revenue Service exchange rate for each day you received income.
If your numbers match the official rate, the audit ends quickly. If not, they may ask for:
English to Georgian translation of your invoices
English to Georgian translation of platform statements
Currency conversion explanations
Date verification for incoming funds
Using the correct daily rate prevents any delays.
How Exchange Rate Rules Affect Tax Residency
If you plan to apply for Georgian tax residency, your income must be declared accurately.Tax residency officers look at:
Bank activity
Dates of receipts
Source of funds
Monthly declarations
Exchange rate consistency
Correct conversion shows that your income is real, earned from remote work performed in Georgia, and taxed correctly at the 1 percent rate.
This helps when applying for:
Residency through 183 days
Residency through the HNWI program
Residency related to foreign income exemptions
What If Your Client Pays You in Crypto
Georgia’s exchange rate rules apply only to fiat income.If your clients pay in crypto and you convert it into fiat before declaring, you must use the Revenue Service exchange rate for the fiat amount on the date it enters your bank or platform.
Crypto conversion details are not used for Small Business Status declarations.
Why Correct Conversion Protects Your Business
Using the correct exchange rate protects you from:
Incorrect turnover declarations
Sudden penalties
Loss of Small Business Status
Banking compliance questions
Residency rejection
Restrictions during Revenue Service audits
It also helps your accountant or service provider keep your records clean.
How Gegidze Helps I.E.s Stay Compliant
Gegidze manages full tax compliance for freelancers, consultants, IT specialists, digital marketers, translators, and other remote workers using the 1 percent IE system.
Our support includes:
Monthly turnover declarations
Correct exchange rate calculations
English to Georgian translation of invoices
Revenue Service communication
Banking coordination
Residency support and filing
Full IE setup and address registration
We ensure every part of your reporting stays accurate so your business stays protected.
If you want clean monthly tax filings with correct exchange rate calculations, book a free consultation with Gegidze.
We make your IE structure fully compliant and audit proof with Revenue Service Georgia.
Frequently Asked Questions (FAQs)
Which exchange rate should an Individual Entrepreneur use to convert foreign income into GEL?You must use the official daily exchange rate published by the Revenue Service Georgia. Bank conversion rates do not matter for tax purposes. The Revenue Service rate is the only rate accepted for your 1 percent Small Business Status declaration.
Do I use the invoice date or payment date for my tax declaration?Always use the payment date, meaning the day the funds became available to you. This applies whether the income arrived through Bank of Georgia, TBC Bank, Wise, Payoneer, Upwork, or any other platform. The invoice date is irrelevant for Georgian tax reporting.
How do I declare multiple payments received on different days?Each payment must be converted separately using the Revenue Service exchange rate for the specific date it arrived. You cannot merge payments or use an average rate. During audits, the Revenue Service checks daily rates against your bank statements and platform records.
