If you are registered as an Individual Entrepreneur (IE) in Georgia and enjoy the 1 percent Small Business Status, you already benefit from one of the world’s simplest tax systems. You work with foreign clients, invoice globally, and pay just 1 percent on your Georgian-source income.

Most people stop there. They assume Georgia’s territorial tax rules protect them everywhere. They assume the country where the client is located does not matter. And they assume foreign tax authorities will never look at their activity because everything is handled through their Georgian Revenue Service account.

In reality, none of that is guaranteed.

Countries across Europe, the United Kingdom, and other regions are becoming increasingly strict about foreign freelancers who work remotely. If you work while physically present abroad, or if your contracts are reviewed by local tax authorities, you might be seen as earning local income. That can trigger a foreign tax obligation.

This is exactly where Double Taxation Treaties (DTTs) step in. These agreements protect you from getting taxed twice on the same income. They define how residency is determined. They outline where business profits should be taxed. And they ensure your 1 percent Georgian tax remains legitimate and defensible.

Understanding these treaties is essential for Georgian IEs who work internationally. Without proper documentation and residency proof, foreign authorities may decide you owe tax in their country. And when that happens, the burden is on you to prove otherwise.

Gegidze helps you prepare all of this correctly. But before you get help, you need to understand how DTTs actually work.

What a Double Taxation Treaty Really Does

A Double Taxation Treaty is a legal agreement between two countries designed to prevent the same income from being taxed twice.

But that is the simple explanation. The real purpose is to create clarity when two countries both claim taxing rights.

A DTT:

Prevents you from being taxed twice.
Defines tax residency rules.
Explains how business profits should be taxed.
Protects you when you work with foreign clients.
Guides tie-breaker rules if both countries want to tax you.
Helps you respond to foreign tax audits and inquiries.

Georgia has treaties with more than 50 countries. These include Germany, France, Italy, Spain, Poland, the United Kingdom, the United Arab Emirates, and several others.

Each treaty follows the general OECD model but includes country-specific details that affect freelancers and entrepreneurs.

This is why Georgian IEs working abroad need to understand their treaty protections. Without the correct documents or residency evidence, you may lose your Small Business benefits internationally.

How Georgian IEs Qualify for Treaty Protection

A DTT protects you only if you can prove you are a tax resident of Georgia. That means:

You spend at least 183 days per year in Georgia, or
You hold Georgian residency through the HNWI program, and
Your business is managed from Georgia, and
Your contracts list your Georgian address, and
You file monthly tax declarations with the Revenue Service Georgia.

Most freelancers focus only on the 1 percent tax. They forget about the rest of the structure. But treaty protection has requirements.

To be treated as a Georgian tax resident, you must show that your:

Business address is in Georgia.
Bank account is in Georgia.
Income is paid to a Georgian IBAN.
Work is organised from Georgia.
Annual tax filings are submitted to the Georgian authorities.

This is why having a reliable virtual address in Georgia, consistent contracts, and proper documentation is crucial. It creates a clean record that positions Georgia as your tax home.

If you skip these steps, your case becomes weak, and it becomes very easy for foreign authorities to say you are a resident of their country instead.

How Foreign Authorities Try to Tax Georgian IEs

If you work with clients abroad, your invoices may be reviewed. If you apply for a long-term visa, your activity may be checked. If you spend more than a few months in a country, your bank payments may be flagged.

Foreign authorities usually ask questions like:

Where is your business address?
Where do you manage your business from?
Where is your bank account?
Where do you live throughout the year?
Do you have a right to work locally?

If you cannot provide strong proof that your business is managed from Georgia, they may treat your income as local.

This is where the DTT helps you. You can show your Certificate of Georgian Tax Residency, your Georgian address, your Georgian IBAN bank statements, and your Revenue Service filings.

Once you provide this, the foreign authority must respect the treaty and allow Georgia to tax your income instead of taxing it locally.

Country-by-Country Guide: How DTTs Affect Georgian IEs

Now let’s dive into how the most important countries interpret remote work and tax residency. This section gives you practical guidance so you understand exactly what to expect when working with clients abroad.

Remember that all of these interpretations depend on you having the correct Georgian documents and maintaining Georgian residency.

European Union Countries

Germany

Germany is one of the strictest countries when it comes to remote work. If you spend more than 183 days in Germany or work regularly from German territory, the tax office may consider you a local tax resident.

Germany asks for strong documentation when reviewing foreign freelancers. This includes:

Your Georgian tax residency certificate.
Your Georgian bank account statements.
Contracts with a Georgian business address.
Proof that management decisions are made from Georgia.

The DTT between Georgia and Germany is robust and usually works well, but only if your documentation is correct.

France

France uses a combination of day counting and “centre of vital interests.” This means if your home, bank, and business operations appear connected to France, you could be classified as a French resident.

To stay protected under the DTT, you need:

A clear Georgian address.
Consistent filings with the Revenue Service Georgia.
Proof that you spend most of your work year in Georgia.

If you work from France temporarily while maintaining ties to Georgia, DTT protection usually holds.

Italy

Italy focuses on where your income is managed and where you habitually live. Long stays create risk. Short stays paired with strong Georgian documentation are usually safe.

Italy frequently requests Georgian residency certificates during compliance checks.

Spain

Spain uses habitual residence rules. If you spend more than 183 days there, you automatically become a tax resident unless you prove Georgian tax residency.

Spanish authorities also check co-working memberships and property leases, so documentation is essential.

Netherlands

The Netherlands has one of the most modern interpretations of remote work. If you work from Dutch territory consistently, even without clients in the Netherlands, they may see your activity as Dutch-sourced.

Your Georgian residency documents must be strong.

Eastern Europe and the Baltics

Poland

Poland has strict reporting requirements and often asks freelancers to justify foreign tax residency. If you are a Georgian IE who works temporarily in Poland, you must maintain Georgian documentation at all times.

The DTT protects you only if your Georgian tax residency is defensible.

Czech Republic

The Czech Republic is moderate but still checks physical presence. Short stays are fine. Long stays require treaty documentation.

Romania and Bulgaria

Both countries follow standard OECD tie-breaker rules. If your business is structured properly in Georgia, you are safe.

United Kingdom

The UK uses residence tracking rules instead of just day counting. Their tests include:

Family ties.
Accommodation ties.
Work ties.
Country ties.

A Georgian IE who spends short periods in the UK usually remains safe under the DTT. But longer stays require strong proof of Georgian residency and management.

United Arab Emirates

The UAE does not tax personal income, but the DTT is still useful. It allows Georgian residents to prove their foreign income is exempt and prevents other countries from stepping in.

This is especially useful for entrepreneurs who split time between Georgia and Dubai.

Turkey

Turkey checks the place of management and control. If you stay long term, they may claim you are a Turkish tax resident. But the DTT protects Georgian residents as long as their documents are prepared correctly.

Israel

Israel is one of the strictest countries in the world regarding tax residency and foreign freelancers. If you spend extended time in Israel, they may question your setup.

You need complete Georgian documentation and a clean compliance history.

How to Use a Double Taxation Treaty Step by Step

Knowing a DTT exists is not enough. You need to understand how to use it in real life, especially when a foreign tax authority requests clarification or attempts to classify you as a local taxpayer.

The process is straightforward if you prepare your documents in advance.

Step 1: Confirm Your Georgian Tax Residency

This is the foundation. You qualify if you spend at least 183 days in Georgia or if you have residency through the HNWI program. Residency is also supported by:

A Georgian business address
A Georgian bank account
Active tax filings with the Revenue Service Georgia
Georgian phone bills, leases, or utility payments

Authorities abroad will always ask where you live and work. Your Georgian residency record answers that question.

Step 2: Obtain Your Certificate of Tax Residency

This is the most important document in the entire treaty process.It is issued by the Revenue Service Georgia and proves you pay tax in Georgia.

Foreign authorities often decline to apply DTT rules unless you provide this exact certificate.

If your certificate or supporting documents are not in Georgian, Gegidze arranges certified English to Georgian translations accepted by all government bodies.

Step 3: Review the Treaty Rules for the Specific Country

Every treaty has small differences. Some countries define Permanent Establishment differently. Some countries use their own residency tests. Some request specific forms or declarations.

Understanding these details ensures you respond correctly when questions arise.

Step 4: Update Your Contracts and Invoices

To make your case stronger, your invoices and client contracts should always include:

Your Georgian business address
Your IE registration number
Your Revenue Service account details
Your Georgian IBAN from Bank of Georgia or TBC Bank

Foreign authorities use contracts as evidence of where your business is based. Consistent Georgian details protect you.

Step 5: Submit Documentation During Foreign Reviews

If a foreign tax office asks about your activity, you provide the full package:

Certificate of Georgian Tax Residency
Georgian bank statements
Your IE registration certificate
Contract copies
Entry and exit stamps showing your time in Georgia
Tax declarations from the Revenue Service

Once this information is submitted, the foreign authority should apply the DTT and accept Georgia’s taxing rights.

Step 6: File Exemption or Disclosure Forms If Required

Some countries require a simple form to activate treaty protection. The UK, Germany, and Spain are common examples.Gegidze helps complete these forms and prepares the required translations.

Common Mistakes Georgian IEs Make With DTTs

Even highly experienced entrepreneurs often misunderstand or misuse treaty protections. These are the mistakes that create the most trouble.

Mistake 1: Assuming the 1 Percent Tax Protects You Everywhere

The 1 percent tax applies only to Georgian-source income.Foreign countries care about where the work was performed.DTTs are what prevent foreign taxation, not the Georgian rate itself.

Mistake 2: Not Obtaining a Residency Certificate Annually

Residency certificates typically cover a single calendar year.If you fail to renew it, foreign authorities may reject your claim under the treaty.

Mistake 3: Ignoring Travel Days

If you work for months from the EU without tracking days, you risk triggering foreign residency rules.

Always track your time abroad. It supports your DTT protections.

Mistake 4: Using Foreign Bank Accounts for Business Income

If your invoices are paid into a Polish, German, or Spanish bank account, those tax offices may decide your business is managed from their territory.

Using a Georgian IBAN from Bank of Georgia or TBC Bank is the safest way to maintain clarity.

Mistake 5: Mixing Addresses

Your contracts, invoices, bank details, and public registration must all list the same Georgian address.Mismatched addresses weaken your claim that the business is operated from Georgia.

Mistake 6: Not Responding to Foreign Tax Queries Correctly

If a foreign authority writes to you, you need to respond with precise documentation. Incorrect replies or missing documents can result in taxation abroad.

Gegidze helps prepare complete document packages and translations accepted by EU and UK authorities.

How Double Tax Treaties Interact With Small Business Status

Many freelancers misunderstand how DTTs and the 1 percent Small Business Status work together.

Here is the simple explanation.

The 1 percent rate applies to Georgian-source income earned through your IE.
A DTT prevents another country from taxing that same income.
The DTT does not change your Georgian tax rate.
The DTT does not affect your 500,000 GEL turnover limit.
The DTT does not cover prohibited business activities.

Think of it this way.Your Small Business Status determines your Georgian tax.The DTT determines how foreign countries treat that same income.

Used together, they create a powerful combination that allows you to work globally while maintaining a stable, low-tax structure in Georgia.

How Gegidze Supports Georgian IEs With DTT Compliance

Treaty protection is only as strong as your paperwork.Gegidze ensures everything is done correctly so you never risk double taxation.

We help with:

Obtaining your annual Certificate of Tax Residency
Preparing contract templates with correct Georgian address details
Monthly IE filing through the Revenue Service Georgia
Document packages for foreign tax inquiries
Certified English to Georgian translation for contracts, certificates, and bank documents
Advice on travel patterns and residency planning
Banking setup with Bank of Georgia or TBC Bank
Guidance on avoiding Permanent Establishment risk

Our goal is simple.To keep your 1 percent structure safe everywhere you work.

With the right documentation, you can operate internationally without delays, confusion, or unexpected tax bills.

If you work with foreign clients or spend time abroad, protecting your Georgian tax setup is essential.

Book a free consultation with Gegidze and let us help you:

Strengthen your residency status
Prepare your documentation
Use DTTs correctly
Avoid double taxation anywhere in the world

Gegidze makes international compliance smooth, predictable, and fully aligned with Georgian law.

Frequently Asked Questions (FAQs)

What is a Double Taxation Treaty and why does it matter for Georgian Individual Entrepreneurs?

A Double Taxation Treaty is an agreement that prevents the same income from being taxed twice. Georgian Individual Entrepreneurs (IEs) working for foreign clients rely on DTTs to prove that their income is taxed in Georgia, not abroad. This protects their 1 percent Small Business Status and ensures they remain compliant with both Georgia and the foreign country.

How do I prove that I am a tax resident of Georgia?

You can prove residency through a Certificate of Tax Residency issued by the Revenue Service Georgia. Foreign authorities often request this document during tax reviews. Consistent use of a Georgian business address, a Georgian bank account, and regular monthly tax filings also strengthen your residency status.

Do I need a Double Taxation Treaty if I never travel outside Georgia?

If you live and work entirely from Georgia, your foreign clients rarely trigger a foreign tax issue. However, having the treaty available is still valuable. It protects you if a foreign client’s tax authority requests proof of residency or reviews cross-border invoices.

Can I be taxed abroad if I spend too much time working outside Georgia?

Yes. If you work abroad for long periods or establish a fixed place of business in another country, you may be considered a tax resident there. A DTT can protect you only if you maintain Georgian tax residency. Tracking travel days and keeping strong Georgian documentation is essential.

How can Gegidze help me use Double Taxation Treaties correctly?

Gegidze manages the full compliance process. We obtain your tax residency certificate, prepare contracts with correct Georgian address details, translate documents (English to Georgian), handle IE tax filings with the Revenue Service Georgia, and guide you through foreign tax inquiries. This ensures your structure stays protected under every DTT Georgia has in place.