United States vs Georgia tax rates at a glance
| Tax | 🇺🇸 United States | 🇬🇪 Georgia |
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| Income tax |
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| Corporate tax |
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| Capital gains tax |
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| Dividend tax |
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| Wealth tax |
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| Inheritance / estate tax |
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| VAT / GST / sales tax |
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| Small-business / IE regime |
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| Foreign-source income |
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Who wins on each tax
Personal income taxGeorgia
Georgia's flat PIT is 20% on Georgian-source income, with a resident foreign-source exemption; the U.S. federal ordinary top rate is 37% before state tax.
Corporate taxGeorgia
Georgia generally taxes distributions at 15% and retained profits at 0% until distributed; U.S. C corporations pay 21% federally as profits are earned, plus possible state tax.
Capital gains taxTie
Georgia commonly uses 20%, or 5% in some cases; U.S. long-term federal rates are 0% to 20%, while short-term gains are ordinary income.
Inheritance / estate taxGeorgia
Georgia has no inheritance tax; the U.S. federal estate tax can reach 40%.
VAT / sales taxUnited States
The U.S. has no federal VAT; Georgia's VAT is 18%.
The verdict
Georgia is a flat, distribution-timed system. Personal income tax is 20% on Georgian-source income, resident individuals are exempt on foreign-source income, and companies generally pay 15% on distributions rather than on retained profits. The United States uses 10% to 37% federal ordinary rates, 21% federal C-corporation tax as profits arise, and worldwide taxation of citizens.
The 1% small-business / individual-entrepreneur turnover regime is the internet headline, and it is not portable. It depends on qualifying local activity, invoicing, turnover limits and a bank that will actually hold the account. Substance theatre from a U.S. sofa does not convert U.S. consulting income into 1% Georgian tax, and it does not bind the IRS.
Choose Georgia for a real Tbilisi or Batumi operation, Estonian-style profit deferral and a foreign-source exemption for Georgian residents. Choose the United States for market access and banking that does not stall. A U.S. passport keeps worldwide U.S. tax on top of whatever Georgia does not charge.
How to read this comparison
Georgia is popular on founder forums because of three numbers: 20% flat personal tax, 15% only when you distribute, and 1% for some small businesses. The United States is unpopular on the same forums because it taxes citizens on everything, everywhere. The forum version skips banking and substance.
Georgian personal income tax is a flat 20% on Georgian-source salary, contractor fees, rent and many other receipts. Resident individuals are exempt on foreign-source income. Tax residence is generally 183 days or more in any continuous 12-month period. There are no traditional social-security contributions, but most employees sit in a mandatory pension scheme of 2% employee, 2% employer and 1% or 2% from the state. That is a lighter payroll story than U.S. FICA, and it is still not a reason to ignore the IRS.
The corporate model is Estonian-style. Retained profits are generally untaxed until a dividend or deemed distribution, then 15% corporate tax applies (20% for banks and similar lenders). Dividend withholding is commonly 5%. VAT is 18% with a GEL 100,000 registration threshold over 12 months. There is no net wealth tax and no inheritance tax, though property tax can apply once family-income thresholds are crossed.
The 1% small-business / individual-entrepreneur turnover regime is the piece people try to export. It is a local status for qualifying small activity, not a remote-work treaty. You need Georgian invoicing, a real activity profile, turnover that stays inside the regime, and a bank willing to onboard a foreign-owned IE or LLC. Georgian banks have tightened, not loosened, that onboarding. Without those facts, the 1% slide is fiction.
A U.S. citizen who becomes Georgian-resident can use Georgia's foreign-source exemption on the Georgian return and still owe U.S. tax on the same foreign-source income. Foreign tax credits help only where Georgia actually taxed the income. A 1% or 0% Georgian result therefore often leaves the U.S. bill intact. CFC-style and information reporting still apply to Georgian companies.
Use Georgia when you will live the substance: local work, local accounts, distribution timing you actually control. Use the United States when the customer, the bank and the fundraising are American. Do not hire a 1% status as a costume for a U.S. consultancy.
Which one fits you
🇺🇸 Choose United States if you're a…
- Founders who need U.S. customers, banks and fundraising
- People who will remain U.S. persons regardless of Georgian residence
- Businesses that cannot satisfy Georgian substance and banking
🇬🇪 Choose Georgia if you're a…
- Individual entrepreneurs with real Georgian activity who qualify for small-business status
- Companies that want to defer tax until distribution
- Residents whose income is foreign-source under Georgian rules
Frequently asked questions
Can a U.S. citizen live on Georgia's 1% small-business tax?
Only if the activity genuinely qualifies, the turnover and invoicing rules are met, and a bank will support the account. U.S. worldwide tax still applies to the same income.
Does Georgia tax retained company profits?
Generally no. The standard 15% corporate tax is triggered on distributions and certain deemed distributions, which is why the model is compared with Estonia.
Does moving to Georgia stop U.S. tax?
No. U.S. citizens remain taxable on worldwide income. Georgia's foreign-source exemption for residents does not bind the IRS.