How to Legally Accept Crypto Payments as a Georgian Individual Entrepreneur (IE) with 1% Tax Status
- Tinatin Tolordava
- 3d
- 6 min read
Table of contents
Can a Georgian IE Legally Accept Crypto Payments
If you are registered as an Individual Entrepreneur (IE) in Georgia with Small Business Status, you can legally accept crypto payments from foreign clients. Many freelancers, Web3 developers, IT specialists, designers, and consultants who work with international clients use this model every month.
The important part is this. Crypto payments must be declared correctly for tax purposes. Crypto is not tax free when earned as business income. It counts as taxable turnover under the 1 percent regime.
Georgia is a crypto friendly country with simple taxation, flexible banking, and a pro business environment. But you must follow the rules. This guide explains exactly how to accept crypto legally, how to stay compliant with the Revenue Service Georgia, and how to avoid mistakes that could cost your Small Business Status.
Can a Georgian IE Legally Accept Crypto Payments
If you are registered as an Individual Entrepreneur (IE) in Georgia with Small Business Status, you can legally accept crypto payments from foreign clients. Many freelancers, Web3 developers, IT specialists, designers, and consultants who work with international clients use this model every month.
The important part is this. Crypto payments must be declared correctly for tax purposes. Crypto is not tax free when earned as business income. It counts as taxable turnover under the 1 percent regime.
Georgia is a crypto friendly country with simple taxation, flexible banking, and a pro business environment. But you must follow the rules. This guide explains exactly how to accept crypto legally, how to stay compliant with the Revenue Service Georgia, and how to avoid mistakes that could cost your Small Business Status.
The Legal Position. Crypto Is Allowed, but It Must Be Taxed Correctly
Georgia recognises cryptocurrency as a digital asset, not legal tender. This means you can receive crypto as payment for your services, but it must be converted into GEL for tax reporting.
Here is the key distinction.
Crypto as an investment held by an individual is tax free.
Crypto received as payment for services by an IE is taxable under Small Business Status at 1 percent.
This applies whether you are paid in Bitcoin, Ethereum, USDT, or any other virtual asset. It also applies whether payments arrive in your own wallet or through a crypto payment gateway.
If you operate as an Individual Entrepreneur, then crypto earnings are treated exactly the same as if they were received through PayPal or a bank transfer.
When Crypto Payments Qualify for the 1 Percent Turnover Tax
Crypto payments fall under the 1 percent tax regime when:
You have Small Business Status approved by the Revenue Service.
Your annual turnover stays under 500,000 GEL.
Your clients are foreign companies or individuals.
You perform the work personally as a natural person.
This is why so many tech and digital professionals relocate to Georgia. They enjoy a simple one percent tax on income that in other countries could be taxed at 25 to 40 percent.
How to Declare Crypto Income Correctly as a Georgian IE
Step 1. Note the date you received the crypto
Your taxable turnover is based on the date the funds arrive in your crypto wallet, not the date of the invoice. If a client sends you 1,000 USDT on the 14th of the month, the Revenue Service exchange rate for the 14th is the one you must use.
Step 2. Convert to GEL using the Revenue Service exchange rate
The Revenue Service Georgia publishes an official daily exchange rate for USD, EUR, GBP and other currencies.For crypto payments, you treat the amount as if it were USD or EUR based on the equivalent value at the moment of receipt.
You do not use:
The Binance rate
The Coinbase rate
Your bank’s conversion rate
Average market rate
You only use the official Revenue Service rate.
Step 3. Submit your monthly declaration
Even if all your income is in crypto, you must still file your IE turnover declaration every month. The declaration shows your GEL turnover. It is a simple form and must be submitted before the deadline to avoid penalties.
Tools and Methods for Accepting Crypto Legally
Direct wallet payments
Your client can pay you directly to your personal wallet. This is the simplest method and the most commonly used by Georgian freelancers.Record the wallet address, the coin received, the amount, and the timestamp.
Crypto payment gateways
You may also use payment processors or merchant tools. Most do not require a VASP license if you accept payments only for your own services and do not hold client funds.
Keywords included: vasp license georgia, crypto license georgia, georgia crypto license.
Stablecoins for smoother accounting
Many IEs prefer receiving USDT or USDC to avoid volatility and to declare consistent turnover in GEL.
Banking Compliance. Cashing Out Crypto as an IE
Georgian banks do not receive crypto directly. They only receive fiat. This means you must convert your crypto to fiat on an exchange before sending it to a bank like Bank of Georgia, TBC Bank, or others.
When you cash out crypto, banks may ask for documents such as:
Invoice to your client
Wallet transaction screenshot
Exchange withdrawal confirmation
Your IE registration extract
Your Small Business Status approval
These requests are normal. Georgian banks are crypto friendly but must follow AML and KYC rules.
VAT Rules When Receiving Crypto as an IE
Crypto itself is VAT exempt, but the service you provide may be subject to VAT if your client is inside Georgia.
VAT considerations:
Foreign clients: no VAT
Georgian clients: VAT may apply if you exceed the 100,000 GEL
When You Need a VASP License Instead
If your activity goes beyond accepting payment for your own services, you may need a VASP license Georgia.
This includes if you:
Exchange crypto to fiat for clients
Hold client crypto
Provide custodial wallet services
Operate a crypto trading platform
Run OTC services
Act as a broker or intermediary
In these cases, you may also fall under regulations similar to obtaining a forex license in Georgia or obtaining a crypto license in Georgia.
Example. A Freelancer Accepting Crypto Correctly
Nika is a freelance Web3 developer registered as a Georgian IE with Small Business Status. He receives 1,000 USDT from his US client.
Here is what he does.
Checks the Revenue Service exchange rate for that day.
Converts 1,000 USDT into the GEL equivalent using that rate.
Declares the amount in his monthly turnover.
Keeps screenshots and wallet proofs in case Bank of Georgia asks when he converts to fiat.
Nika pays 1 percent tax and keeps his structure fully compliant.
Best Practices for Crypto Paid IEs
Prefer stablecoins
Keep separate wallets for business income
Do not mix personal crypto investments with client payments
Maintain detailed transaction logs
Keep your invoices clear
Download wallet statements monthly
Convert only when needed
Store your exchange withdrawal confirmations
Use Gegidze if you need help with accounting and compliance
How Gegidze Helps You Accept Crypto Legally
Gegidze supports crypto-focused IEs with:
IE registration
Small Business Status application
Monthly turnover declarations
Crypto to GEL tax calculation
Documentation for Georgian banks
Compliance with Revenue Service
English to Georgian translations for contracts
Support with VASP licensing
Advice on switching from IE to LLC
If you want to accept crypto payments legally as a Georgian IE and avoid mistakes that can cost you your 1 percent tax status, book a free consultation with Gegidze.
We will guide you through every step, from correct turnover declarations to banking compliance and crypto friendly accounting.
Frequently asked questions (FAQs)
Can a Georgian Individual Entrepreneur legally accept crypto as payment for services?
Yes. A Georgian IE with Small Business Status can legally accept crypto payments from foreign clients. Crypto received for work is treated as taxable turnover and taxed at 1 percent as long as you stay under the 500,000 GEL annual limit.
How do I declare crypto income under the 1 percent Small Business Status?
You convert the crypto amount into GEL using the official Revenue Service Georgia exchange rate on the day the payment arrives in your wallet. You then declare that GEL amount in your monthly turnover declaration.
Do I need a VASP license to accept crypto for my freelance services?
No. You only need a VASP license Georgia if you provide crypto financial services like exchange, brokerage, custody, or platform operations. If you accept crypto only as payment for your own work, no VASP license is required.
