“Georgia does not tax capital gains” — the sentence is right in outcome for most people moving there and wrong in its reasoning all the same. There is no capital-gains exemption in the Georgian Tax Code. What there is, is territorial taxation of natural persons: someone resident in Georgia pays nothing on income that does not come from a Georgian source. The distinction is not wordplay. It decides what happens when the source connection changes — and it leaves a question open for active traders that the Tax Code simply does not answer.
Why the reasoning matters
An exemption and a lack of taxability look identical on a bank statement and behave entirely differently as soon as something changes.
The Georgian Tax Code first makes a resident natural person taxable on an unlimited basis in Article 79. The territorial result arises only downstream, through the exemption in Article 82(1) — in the Georgian original sub-paragraph “ფ”, in the official English translation letter “u”. Exempt is income that does not come from a Georgian source.
From which follows the practically most important sentence of this article: it is not the instrument that decides but the source. A foreign broker, foreign instruments, a gain on their disposal — that is not a Georgian source and is therefore exempt. If one of those connecting points moves to Georgia, the question has to be asked afresh, and the answer is then no longer in Article 82.
The question the Tax Code does not answer
It comes up in almost every advisory conversation: at what trading frequency does private asset management become a trade?
In Germany and Austria that is a well-developed legal question. In Georgia the position is different, and it needs describing precisely, because both of the common answers are wrong.
Article 9(1) defines economic activity as broadly as can be: any activity directed at obtaining income or compensation, irrespective of the result. The article contains no “one-off versus systematic” criterion — nowhere. Anyone looking for a citation for the proposition that occasional sales are not economic activity will not find one in the Tax Code.
Article 9(2) lists what is not economic activity. There too, no item on securities or shares appears. What does appear there, and is often what people mean, is something narrower: the placing of money by a natural person into deposits and savings accounts with banks and other credit institutions is not economic activity. That covers the savings account, not the securities account.
The repetition criterion many people have in mind does exist in Georgia — but in the Law on Entrepreneurs, which describes entrepreneurial activity as repeated, independent and organised. The Tax Code cross-refers to that Law in Article 9(3) for a different purpose but does not import the repetition test into the definition in paragraph 1.
Three spheres that belong apart
| Your own portfolio | Individual entrepreneur, 1% status | Bank balance | |
|---|---|---|---|
| Whose capital | yours | clients pay for your service | yours |
| Category of income | surplus on disposal | turnover from economic activity | interest |
| Inside the 1% turnover | no — Annex No. 5 | yes | no — Annex No. 5 |
| Where the source is foreign | exempt — Art. 82(1) | not applicable | check separately |
| Separate account needed | yes | yes | can be separated |
One question we deliberately leave open here, because it could not be evidenced cleanly. In some renderings the heading of Annex No. 5 carries a second limb under which such income is also not counted in the gross income received within the framework of the small business — portfolio gains would then not consume the GEL 500,000 threshold. The freely accessible version does not carry that limb consistently, and since the answer decides the tax tier of an entire year we assert it in neither direction. Anyone with meaningful portfolio gains alongside an operating business should have it settled against the consolidated text.
Residence is the actual work
The exemption presupposes that you are resident in Georgia. That is the part where more goes wrong in practice than in the classification of the gains.
- 183 days in any continuous twelve-month period Art. 34(2) — the period must end in the relevant tax year. It is rolling and not tied to the calendar year; a stay straddling the year end can trigger residence.
- The consequence is residence for the entire tax year not only from day 183 — material for planning the year of the move
- Any part of a day counts as a full day arrival and departure days each count as a whole day
- Time abroad for treatment, leisure, business travel or education is added back Art. 34(3) — holidays and business trips abroad therefore still count towards the Georgian days
- Time in Georgia for treatment and leisure is taken out Art. 34(4) — this rule pulls against the previous one, and the statute does not resolve the tension. Anyone planning close to the line should rely on neither.
- Residence in the country you are leaving does not end automatically It ends on that country’s rules, and where there is dual residence the relevant treaty decides. This is the most common expensive mistaken assumption in the whole subject.
The last point deserves the emphasis. Georgian residence is a necessary condition, not a sufficient one. For as long as the country you are leaving continues to treat you as resident — because of a retained home, because of the centre of your life, because of a deregistration never completed — the Georgian exemption does not help against its claim. That check belongs to an adviser in that country and not to us; we only say that it has to happen before the portfolio moves.
What follows from this
Separate the accounts before you start. Your own portfolio and the individual entrepreneur’s business account belong apart — not out of tidiness, but because both spheres are favourable in themselves and mixing them destroys your ability to prove it.
Do not rely on the formula “capital gains are tax-free”. What is correct: foreign income of a resident is exempt under Art. 82(1). Taking the shorter version away with you means missing that it hangs on the source.
And treat residence as the actual project. The tax consequence is simple; its precondition is not.
FAQ
Are capital gains tax-free in Georgia?
For a person resident in Georgia, gains from a foreign securities account holding foreign instruments are untaxed — but not because a capital-gains exemption exists. There is none. The reason is territorial taxation: Art. 82(1) of the Tax Code exempts income of a resident natural person that does not come from a Georgian source. The distinction is not wordplay — it explains why the same gains from a Georgian account holding Georgian securities may be treated differently, and why the question has to be asked afresh whenever the source connection changes.
Does Georgia distinguish long-term investing from day trading?
Not by trading frequency — and that is more remarkable than it sounds. Article 9 defines economic activity broadly and irrespective of result; it contains no "one-off versus systematic" criterion. A distinction does exist, but elsewhere and on different features: a gain on assets held for more than two years is exempt unless the assets were used for an economic activity, and merely holding securities for dividends or interest does not count as such use. The test therefore runs on holding period plus use, not on "investor versus day trader". The widespread notion that above a certain trading frequency private asset management becomes a trade comes from the Law on Entrepreneurs, not from the Tax Code, and the Tax Code does not import it into the definition. As long as the gains are foreign-source the question has almost no practical effect, because the exemption applies anyway. It would become relevant where there is a Georgian source connection.
Do portfolio gains belong in the 1% base?
No, on two separate grounds. First, Annex No. 5 to Resolution No. 415 expressly names the surplus ("ნამეტი") on the disposal of securities as a category of income not taxed under the special regime. Second, Art. 90(3) confines the base to Georgian-source income, which a foreign account does not produce. Both point the same way: your own portfolio and the individual entrepreneur are two separate spheres. Whether such income additionally leaves the GEL 500,000 threshold untouched turns on a second limb of the annex heading that the freely accessible version does not carry consistently — so we assert it in neither direction.
What about interest on the bank account?
Two things need separating. The mere placing of money by a natural person into deposits and savings accounts with banks and other credit institutions is not economic activity under Art. 9(2) — so it does not make you an entrepreneur. That says nothing about whether the interest itself is taxable. For interest, the residence of the payer is a connecting factor for the source, unlike for services; Georgian bank interest is therefore not simply equivalent to foreign interest. Anyone with meaningful interest income should have that position checked separately rather than filing it under "foreign income".
When am I actually resident in Georgia?
Under Art. 34(2) of the Tax Code, on 183 days in any continuous twelve-month period ending in the relevant tax year. Two points are regularly misstated: the period is rolling and not tied to the calendar year, and the consequence is residence for the entire tax year, not only from day 183. The counting rules are idiosyncratic too — time spent abroad for treatment, leisure, business travel or education is added back, while time spent in Georgia for treatment and leisure is taken out. Those two rules pull against each other, and the statute does not resolve the tension.
Do I have to declare my own portfolio in Georgia?
We deliberately do not answer that in the abstract. It depends on what other income you have and whether a filing obligation arises for another reason. What usually matters more is the other side: the country you are leaving has its own reporting and filing obligations for foreign accounts, and automatic exchange under the Common Reporting Standard reports accounts there for as long as you are resident there. Opening the account before residence has cleanly changed produces precisely the report you did not expect.
As at: August 2026. Provisions cited: Tax Code of Georgia Art. 9 (economic activity), Art. 34 (residence), Art. 79 (liability), Art. 82(1) (exemptions, in particular the territorial rule and the two securities exemptions), Art. 90(3) (small-business base), Art. 104 (source); Government of Georgia Resolution No. 415 of 29 December 2010, Annex No. 5; Law of Georgia on Entrepreneurs.
On sourcing: the basis is the Georgian wording of the Tax Code; the official English translation on matsne.gov.ge is roughly eleven years old and out of date in several places — for Art. 34 it is missing, among other things, a residence route for foreign nationals inserted in 2020. We are not aware of any published administrative position of the Revenue Service on the boundary between private asset management and economic activity. This article is not tax or legal advice and says nothing about the tax law of the country you are leaving.