No VAT Globally: Understanding the VAT Exemption on Crypto Services in Georgia for Foreign Clients

Why Georgia’s VAT Rules Matter for Crypto and Web3 Businesses

Most crypto businesses spend far too much time worrying about cross border VAT complications. The rules are confusing in Europe, strict in North America, and rigid in many Asian markets. Yet Georgia offers something very different. If your crypto business works with foreign clients, Georgia applies no VAT globally on your services.

This exemption is one of the main reasons Web3 founders, blockchain developers, crypto analytics firms, smart contract auditors, iGaming operators, DeFi consultants, and NFT platforms choose to register in Georgia. The country has clear tax rules, a territorial tax system, and a crypto friendly environment that simplifies life for remote teams and international customers.

This blog breaks down exactly how the VAT exemption works for crypto and digital service providers. It explains why Georgia offers such a unique regime and how it interacts with Individual Entrepreneur (IE) taxes, LLC structures, VASP license Georgia, and georgia country tax rates.

Georgia’s Territorial Tax System. The Starting Point for VAT Exemption

Georgia uses a territorial tax system. This means that only income generated inside Georgia is taxed. Income generated outside the country is not subject to local tax. This includes both corporate income and indirect taxes such as VAT.

If your crypto business provides services to clients outside Georgia, the service is treated as foreign sourced. That classification triggers VAT exemption.

This applies to blockchain development, tokenomics consulting, exchange integrations, Web3 software services, trading bots, analytics, design, auditing, smart contract engineering, and more.

Freelancers, IEs, and LLCs all benefit.

What Crypto Services Are VAT Exempt When Provided to Foreign Clients

Georgia exempts a broad category of services when the buyer is located abroad. For crypto and digital businesses, the following qualify as VAT exempt.

Web3 development

Smart contracts, blockchain infrastructure, token contracts, DApp building, backend integrations, decentralized architecture design.

Crypto consulting

Tokenomics, exchange listings, liquidity setups, staking design, compliance consulting, DeFi system strategy.

Crypto marketing

Influencer partnerships, campaign design, community growth, multilingual content creation, brand development.

Trading and analytics

Market intelligence, data dashboards, algorithmic trading software, AI models.

Blockchain auditing

Security audits, penetration testing, vulnerability detection, code review.

iGaming and fintech development

Platform architecture, wallet integration, smart wallet solutions.

If your customer is outside Georgia, and your business is inside Georgia, your invoice is automatically zero VAT.

This applies whether you operate through an Individual Entrepreneur, an LLC, or a crypto licensed structure.

Why Crypto Companies Love the No VAT Rule

In many countries, crypto services fall into ambiguous VAT categories that require long explanations to tax authorities. Payments often become complicated because the classification of crypto as a digital asset, security, commodity, or value token changes across jurisdictions.

Georgia avoids this entirely. It treats your service as exported. Foreign client means foreign revenue. Foreign revenue means no VAT.

The benefits are significant.

No VAT increases your competitiveness

If your competitors in the EU must charge 20 to 27 percent VAT for the same services, you can offer a lower price without sacrificing margins.

Simpler invoices and easier accounting

There is no VAT line, no VAT filings, no VAT refunds, no inputs or outputs. You keep your structure clean.

Faster payments from foreign clients

Clients do not question taxation or VAT obligations.

Predictable revenue for scaling

Crypto businesses need predictable tax structures when scaling quickly. Georgia provides that stability.

When VAT Applies. The Situations Georgia Still Taxes

Georgia’s VAT exemption applies only when your client is foreign. If your client is inside Georgia, different rules apply.

When your client is located in Georgia

If you provide crypto, IT, Web3, or consulting services to a Georgian company or individual, VAT may apply.

When you cross 100,000 GEL in domestic revenue

Once you exceed the georgia vat registration threshold 100,000 gel revenue service, your VAT obligations begin for domestic clients.

When your crypto business provides services inside Georgia

Exchange platforms, mining centers, or regulated VASP operators providing local services may require VAT registration.

This is why crypto businesses that operate globally prefer Georgia. Almost all their work is exported. Almost none is domestic. Which results in zero VAT for almost all revenue.

VAT and Individual Entrepreneurs. How the 1 Percent Tax Model Interacts With VAT

The 1 percent IE regime is the most popular structure among remote crypto workers, Web3 developers, designers, and blockchain consultants.

Here is how VAT interacts with the IE model.

If all your clients are foreign

You have no VAT obligations.You pay 1 percent tax on your turnover up to 500,000 GEL per year.

If you have local clients

You may need VAT registration depending on your revenue level.VAT does not replace IE tax. They apply separately.

If you work only with foreign clients as most crypto freelancers do

You never enter the VAT system at all.

VAT for LLCs Offering Crypto Services

LLCs offering crypto or Web3 services to foreign clients also benefit from no VAT globally. Most foreign revenue is fully exempt, no matter the service type.

However, LLCs must still watch for:

• Domestic clients

• Domestic economic activity

• Licensing status under VASP rules

• AML obligations for crypto holdings

• SOCF documentation for cashing out

• Clear invoicing structure

If an LLC provides crypto services globally, it may qualify for other incentives such as Virtual Zone or International Company programs depending on the business model.

SOCF and VAT. Why They Work Together

When cashing out crypto revenue to Georgian banks, the key focus is SOCF. Banks check:

• Where crypto came from

• Whether the client is foreign

• Whether invoices match the service

• Whether you declared your income

• Whether the nature of the service is VAT exempt

SOCF ensures your funds are legitimate. VAT exemption ensures your invoices do not need to charge VAT for foreign services.

When You Might Need a VASP License Despite VAT Exemption

VAT rules and VASP rules are separate. Your services can be VAT exempt for foreign clients but still require licensing if:

• You custody assets

• You operate a crypto platform

• You exchange crypto for others

• You manage wallets

• You hold client funds

• You run iGaming or platform-based ecosystems

If your business model fits any regulated category, you may need a VASPs license Georgia or even a crypto license Georgia under the National Bank of Georgia’s supervision.

VAT exemption does not remove licensing obligations.

Why Startups Relocating to Georgia Benefit From No VAT

Startups love Georgia because:

• There is no VAT for foreign clients

• Corporate income tax applies only when distributing profits

• IEs pay 1 percent tax

• Crypto is tax free for individuals

• Banking is stable and crypto friendly

• Compliance is simpler than in the EU or US

• The cost of living is low

For Web3 companies, iGaming projects, blockchain consultancies, and fintech developers, Georgia offers a rare combination. Low cost. Low tax. Clear rules. Zero VAT globally.

How Gegidze Helps You Structure VAT Free Crypto Services

Gegidze supports crypto and digital service businesses by:

• Registering IEs

• Creating LLCs

• Filing Small Business Status

• Advising on VAT exemptions

• Preparing SOCF files

• Helping determine if a VASP license is needed

• Managing accounting for crypto businesses

• Offering Employer of Record in Georgia for hiring local staff

• Preparing English to Georgian translations for contracts and tax filings

We ensure your entire structure runs smoothly with full compliance and zero VAT complications.

If your crypto, Web3, or international service business wants to take full advantage of Georgia’s no VAT globally rules, book a free consultation with Gegidze.

We will help you structure your tax profile, ensure correct compliance, and prepare everything needed to operate with zero VAT for foreign clients.

Frequently Asked Questions (FAQs)

Are crypto services to foreign clients always VAT exempt in Georgia?

Yes. Georgia applies a territorial tax system. If your crypto, Web3, DeFi, iGaming, or blockchain service is provided to a foreign client, it qualifies as exported service. Exported services are not subject to VAT under georgia country taxes and vat in georgia rules. You can invoice clients at zero percent VAT regardless of your business size.

Do Individual Entrepreneurs with 1 percent tax status need to worry about VAT?

Only if they work with Georgian clients. An IE with georgia small business status 1 percent tax turnover 500,000 gel 2025 pays 1 percent tax on foreign revenue and does not charge VAT for exported services. VAT only applies when revenue comes from Georgian customers or when IE domestic turnover exceeds the georgia vat registration threshold 100,000 gel revenue service.

Does VAT exemption mean a crypto company does not need a VASP license?

No. VAT and licensing are completely separate. A crypto company may have zero VAT for foreign customers but still require licensing if it performs regulated activities. You may need a VASP license Georgia or a crypto license Georgiawhen providing custody, exchange, brokerage, wallet management, or crypto platform services.