Moving tax residency from Italy to Georgia drops a solo entrepreneur’s effective rate from 43%–47% IRPEF (or the €300,000 Article 24-bis flat tax) to 1% of turnover under Georgia’s Small Business Status, with 0% on foreign-source personal income for the resident-individual layer above it — for under USD 1,000 of setup cost and a 1–10 day registration timeline at the Public Service Hall in Tbilisi. Unlike the Italy-to-Paraguay corridor, Georgia is not on Italy’s 1999 lista nera of privileged tax jurisdictions, the Article 2(2-bis) TUIR burden-reversal presumption does not apply, and the Italy-Georgia double-tax treaty in force since 2008 delivers a working Article 4 tie-breaker. The catch: Georgia sits outside the EU and EEA, so Article 166 TUIR’s six-year instalment deferral is unavailable for founders transferring an Italian operating business, and the Small Business Status’s 500,000 GEL (~USD 180,000) turnover ceiling rules out scaled SaaS or agency teams.
The Tax Delta at a Glance
| Italy (current) | Georgia (after move) | |
|---|---|---|
| Headline regime | Ordinary IRPEF 23%–43% + regional/municipal surcharges (≤4.13%), OR Article 24-bis flat tax €300,000/yr | Small Business Status — 1% of turnover up to 500,000 GEL (~USD 180,000); 0% on foreign-source personal income above the IE layer |
| Family add-on | €50,000 per family member under 24-bis | None — territorial treatment of foreign personal income applies to the household |
| Personal income tax (foreign income) | Inside €300K flat tax, otherwise 23%–43% IRPEF + ≤4.13% surcharges | 0% — outside Georgian taxing scope for individuals under the territorial approach |
| Foreign dividends, interest | Inside flat tax, or 26% substitute tax | 0% (foreign-source) at the individual layer |
| Foreign capital gains | Inside flat tax, or 26% substitute tax on qualified participations | 0% for individual residents (assets held >2 years are outright exempt; foreign-source treated as out-of-scope) |
| Georgian-source business income | n/a | 1% under Small Business Status up to 500K GEL; 3% on excess in transition years; 20% standard PIT if Status revoked |
| Wealth / IVIE / IVAFE on foreign assets | Exempt while in 24-bis; otherwise 0.76% real estate / 0.2% financial | None — Georgia levies no net-wealth tax |
| Inheritance / gift tax | Exempt while in 24-bis; otherwise 4%–8% with allowances | None between close relatives; non-relative transfers up to ~5% above threshold |
| Days/year required at destination | n/a | 183+ days in any rolling 12-month period for tax residency, OR HNWI route with no day-count |
| Minimum economic threshold | None (24-bis is a tax payment, not investment) | None for IE / Small Business; HNWI route requires GEL 3M+ in worldwide assets or GEL 200K+ income for 3 years |
| Effective rate (€500K foreign-source income, solo founder) | ~€215,000 ordinary IRPEF + IVAFE OR €300,000 24-bis | ~€1,800 (1% of turnover) + €0 on foreign-source personal income |
The headline number for an Italian solo founder with USD 150,000–180,000 of consulting or SaaS turnover is that Georgia delivers an effective annual tax bill roughly two orders of magnitude below ordinary Italian IRPEF and well below Italy’s 24-bis floor, at a setup cost that is itself two orders of magnitude lower than 24-bis. Where Georgia is not the answer is the scaled-revenue case (>USD 180,000 turnover) and the heavily-regulated-activity case (financial services, gambling, currency-exchange) that fall outside the Small Business Status whitelist.
Step-by-Step Move
Step 1: Confirm you can legally cease Italian tax residency under Article 2 TUIR
Italian tax residency is governed by Article 2, paragraph 2 TUIR. A natural person is deemed Italian-resident for the entire fiscal year if, for more than 183 days (184 in a leap year), any one of three alternative tests is satisfied: registration in the Anagrafe della Popolazione Residente at any commune, domicilio in Italy under Article 43 of the Civil Code (the centre of business and personal interests), or residenza under the same article (habitual abode).
The first procedural step is therefore deregistration from the Anagrafe at your commune of departure and simultaneous registration in AIRE (the Anagrafe degli Italiani Residenti all’Estero) at the Italian Embassy in Tbilisi, Via Krtsanisi 3/a. The AIRE application must be filed within 90 days of arrival. Until AIRE is recorded, the anagrafica limb of Article 2 TUIR keeps you Italian-resident regardless of physical location. AIRE alone is procedural — it does not, on its own, defeat the domicilio and residenza tests, which are factual and audit-driven. Cassazione case law (Cass. Sez. Trib. n. 21970/2015 and n. 32992/2018) treats family co-location and operational business location as near-decisive on the domicilio limb.
Step 2: Confirm Georgia is not on Italy’s lista nera
This is the most important difference between the Italy-Georgia and Italy-Paraguay corridors. Georgia is not listed in the Ministerial Decree of 4 May 1999 establishing the lista nera of privileged tax jurisdictions for natural persons. Georgia is a CRS-reporting state, has signed the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and operates a bilateral DTT with Italy (see Step 4). The legal consequence is that the Article 2(2-bis) TUIR burden-of-proof reversal does not apply, and the raddoppio dei termini extended assessment window is not automatically triggered by the destination alone.
This does not mean an Italy-Georgia move is unaudited. The Agenzia delle Entrate’s HNW-relocation enforcement units screen exits to any low-effective-tax destination on a risk-based basis, and Georgia’s 1% Small Business Status alone makes the file interesting to a reviewer. The taxpayer carries the ordinary burden of proving non-residence on the factual domicilio and residenza limbs, but the burden is no longer reversed. The defence file looks similar to a Paraguay or Panama exit (lease, schooling, banking, days log), but the legal posture is materially friendlier — the Agenzia must prove retained Italian domicilio, not merely point to the destination’s regime.
Step 3: Plan around Article 166 TUIR — and accept that the EU instalment deferral is unavailable
Italy’s exit tax — Article 166 TUIR, in its post-ATAD form set by Legislative Decree 142 of 29 November 2018 — is a deemed-disposal regime targeted at business activities transferring residence abroad: companies, partnerships and individual entrepreneurs (imprenditori individuali) whose business assets cease to be connected to an Italian permanent establishment. Pure portfolio shareholdings held by an individual as private assets sit outside Article 166’s perimeter; ordinary capital gains rules apply on later disposal.
For founders who do trigger Article 166, the move to Georgia is meaningfully harsher than the parallel move to Malta, Cyprus or Portugal because the six-year instalment deferral is reserved for transfers to EU/EEA states with adequate exchange of information. Georgia is neither EU nor EEA, so the deemed-disposal latent gain is payable in full in the year of transfer at ordinary IRES (24%) or progressive IRPEF rates. A founder with €5M of latent gain on an SRL stake faces an immediate ~€1.2M assessment, whereas the same founder moving to Cyprus or Malta could spread it over six years.
The standard alternatives are therefore (a) pre-departure restructuring of the holding chain — for example, an interposed Maltese or Cypriot holding company taken on before the Georgian move so the Italian PE link is broken cleanly inside the EU regime, or (b) leaving the Italian SRL stake in place and selling it post-emigration as a non-resident, accepting the 26% substitute tax on capital gains from qualified participations under Article 68 TUIR — subject in this corridor to the Italy-Georgia DTT’s Article 13 capital-gains allocation. Both routes need rigorous Article 73 TUIR place-of-effective-management hygiene, because Italian directorship or management decisions taken from Tbilisi can reclassify the company as Italian-resident.
Step 4: Establish Georgian residency and the 1% Small Business Status
Georgia is uniquely setup-friendly for an Italian arriving on a passport that grants 365-day visa-free entry. The two-track plan is:
- Tax residency layer (individual): spend 183+ days in Georgia in any rolling 12-month period and obtain a Georgian tax-residency certificate from the Revenue Service for treaty access. For Italian clients with multiple bases, the HNWI track (worldwide assets >GEL 3,000,000 or income >GEL 200,000/year for the prior three years, plus a Georgian asset or income link) waives the day-count entirely.
- Operating layer (Individual Entrepreneur + Small Business Status): register as IE at a Public Service Hall in Tbilisi and apply for Small Business Status with the Revenue Service. The IE pays 1% of gross turnover as the final personal income tax on that activity, up to 500,000 GEL/year. There is no separate corporate, dividend or social-tax layer on top of the 1% for the IE structure itself.
Setup cost is under USD 1,000 end-to-end with a Tbilisi-based law firm, processing time is 1–10 business days, and the typical sequence is enter-Georgia → open TBC or Bank of Georgia → IE registration → Small Business Status application → first invoice. Excluded activities (financial services, gambling, currency-exchange, regulated consulting) cannot use the 1% Status — get an Italian-Georgian advisor’s written opinion before assuming a borderline activity qualifies. The full destination-side breakdown is at Tax-Free Residency in Georgia, and the natural comparison for an Italian is the Italy to Cyprus corridor for households weighing EU access against the Caucasus 1% rate.
Step 5: Document the break, secure the Georgian tax-residency certificate, and file the final IRPEF return
With a DTT in force, the Italy-Georgia tie-breaker (Article 4) is available — but it only triggers if Georgia issues a tax-residency certificate for the year. Request the Georgian certificate from the Revenue Service annually, and file your final Italian dichiarazione dei redditi (Modello Redditi PF) for the year of departure — covering worldwide income for the entire fiscal year if you crossed the 183-day Italian threshold, otherwise Italian-source only. Build a contemporaneous evidence file: AIRE certificate from the Embassy in Tbilisi, Georgian tax-residency certificate, IE registration and Small Business Status decision, long-term Tbilisi or Batumi lease, Georgian bank statements with substantive monthly inflows and local spend, school enrolments at Tbilisi international schools where applicable, Georgian private health insurance, days-of-presence log, terminated Italian leases, closure of Italian primary banking, and deregistration from any Italian professional orders.
Italian banks have grown comfortable with Georgian-resident clients on a non-resident profile (CRS reporting goes through cleanly), but EU banks abroad sometimes ask follow-up questions when CRS data shows Georgia as primary tax residency without a clear narrative. Lead with the Georgian tax-residency certificate, the IE registration and the Tbilisi lease — that combination defuses substantially all routine questioning.
Cost & Timeline
| Phase | Cost (EUR / USD) | Time |
|---|---|---|
| Italian tax planning + Article 166 modelling (founders) | €5,000–€20,000 | 1–3 months |
| Pre-departure SRL restructuring (if applicable) | €10,000–€40,000 | 3–6 months |
| Anagrafe deregistration + AIRE registration (Embassy Tbilisi) | €0 admin + travel | 1–3 months |
| Final IRPEF dichiarazione (year of departure) | €1,500–€4,000 | Filed by 30 November of following year |
| IE registration at Public Service Hall + Small Business Status | ~GEL 50–100 government + USD 300–800 legal | 1–10 business days |
| Georgian bank account opening (TBC / Bank of Georgia) | USD 50–150 | ~1 day in person |
| Georgian tax-residency certificate (annual) | Nominal | Issued on request |
| First-year Italian + Georgian filings | €2,500–€6,000 | Annual |
| Article 166 instalment liability (founders, no EU deferral) | Immediate full pay-out | Year 1 |
| Annual recurring regime cost | 1% of turnover (capped at 500K GEL × 1% = ~USD 1,800) | Ongoing |
| Total year-1 effective cost (solo entrepreneur, IE+Status route) | €8,000–€15,000 + ~USD 1,500 | 3–6 months |
The headline insight versus 24-bis is that Georgia delivers a 1% effective rate on operating turnover and 0% on foreign-source personal income for under USD 1,000 of setup cost, with no €300,000 annual forfait and no €50,000 family add-on. The dominant cost lines are the Italian-side legal cost and, where relevant, Article 166 — not anything Georgia charges.
Treaty Considerations
The Convention between Italy and Georgia for the avoidance of double taxation, signed in Rome on 31 October 2000 and in force since 19 February 2008, is the load-bearing instrument for this corridor. Article 4 supplies the standard OECD-model tie-breaker cascade: permanent home → centre of vital interests → habitual abode → nationality → mutual agreement procedure. For an Italian who has rented out the Italian home, moved spouse and children, registered in AIRE, obtained the Georgian certificate and is spending the bulk of the year in Tbilisi, Article 4 resolves residency to Georgia rather than Italy — a defensive line not available in the Italy-Paraguay corridor (where no treaty exists).
Article 10 of the treaty caps Italian-source dividend withholding to a Georgian-resident individual at the treaty rate (10% on portfolio dividends in most circumstances) versus the 26% domestic substitute tax; Article 11 caps interest withholding (typically 0%–10% depending on the payer); Article 12 caps royalties. Article 13 allocates capital gains taxing rights — most categories to the residence state, with carve-outs for Italian real-property gains and for gains on substantial holdings in Italian-resident companies, which Italy retains the right to tax under Article 68 TUIR’s qualified-participation regime regardless. Pre-departure restructuring of any continuing Italian-source flows through these treaty caps is a standard high-leverage planning move for clients with retained Italian dividends, royalties or rental income.
Common Mistakes
- Skipping AIRE registration at the Embassy in Tbilisi. Without consular AIRE within 90 days, the anagrafica limb of Article 2 TUIR keeps you Italian tax resident even if you live in Georgia 365 days a year.
- Confusing IE registration with Georgian tax residency. Small Business Status is tied to the IE registration, not to physical presence. Many Italians register the IE, run the 1% regime from outside Georgia, and discover that without 183+ days or HNWI status they are not Georgian tax residents — leaving them exposed to Italian domicilio claims with no Georgian certificate to invoke under Article 4.
- Assuming 24-bis is always the cheaper option. For solo founders earning under €1M, Georgia’s 1% + 0% beats 24-bis’s €300,000/year by an order of magnitude. 24-bis only dominates above roughly €1.5–2M of pure-foreign income with 24-bis-grandfathered status.
- Triggering Article 166 TUIR without restructuring. Founders moving the Italian SRL’s seat to Georgia pay the full deemed-disposal assessment in year one with no EU instalment deferral. Pre-departure restructuring through an EU holding company is usually the right answer.
- Treating IE registration as enough audit defence. Italian Cassazione case law looks at family and operational centre. Without the Tbilisi lease, the Georgian school enrolment for minor children, and the Italian primary residence let on arm’s-length tenancy, the IE-only file is weak.
- Spending more than 183 days in Italy after the move. Re-triggers Article 2 TUIR residency on the day-count limb and unwinds the entire planning, regardless of the Georgian certificate.
- Pushing turnover above 500,000 GEL without a transition plan. Two consecutive years above the ceiling revoke Small Business Status and revert the activity to standard 20% PIT on Georgian-source business income — graduate to a Georgian LLC under the distribution-model regime before the second-year cliff.
FAQ
Will I still have to file an Italian tax return after moving to Georgia?
For the year of departure — yes, a final dichiarazione dei redditi (Modello Redditi PF) covering worldwide income for the entire fiscal year if you crossed the 183-day Italian threshold, otherwise Italian-source income only. After clean AIRE registration, ongoing Italian filings are required only for Italian-source income (Italian rental property, Italian director’s fees, INPS pensions, Italian dividends through Italian intermediaries). For founders, any retained ordinary-course Article 166 TUIR exposure not extinguished at departure continues to require Italian filings.
Is Georgia on Italy’s blacklist?
No. Georgia is not listed in the Ministerial Decree of 4 May 1999 establishing the lista nera of privileged tax jurisdictions for natural persons. The Article 2(2-bis) TUIR burden-of-proof reversal does not apply, the raddoppio dei termini is not automatically triggered by the destination, and Italy and Georgia operate a DTT in force since 2008. The taxpayer carries the ordinary burden of proving non-residence on the factual domicilio and residenza limbs, but the legal posture is materially friendlier than the Paraguay or Panama corridors.
Is there a double-tax treaty between Italy and Georgia?
Yes. The Convention for the avoidance of double taxation, signed in Rome on 31 October 2000, has been in force since 19 February 2008. Article 4 supplies the OECD-model tie-breaker. Article 10 caps Italian-source dividend withholding at the treaty rate (10% in most circumstances) versus 26% domestic; Articles 11 and 12 cap interest and royalties; Article 13 allocates capital gains taxing rights largely to the residence state, with carve-outs for Italian real property and substantial holdings.
Can I keep my Italian SRL stake, bank accounts and home?
Italian bank accounts can be retained on a non-resident profile; Georgian-resident clients are routinely accepted by Italian retail and private banks given CRS visibility. A retained Italian SRL stake is permitted, but active management from Tbilisi feeds domicilio and Article 73 TUIR place-of-effective-management challenges; passive minority holdings only. A retained Italian dwelling that remains “available to the taxpayer” is fatal for the domicilio limb — convert it to an arm’s-length 12+ month tenancy to a non-family tenant before departure or transfer it to a separate corporate vehicle.
How long does the full move take?
Realistic timeline is 3–6 months from first planning meeting to operational Georgian banking, IE registration, Small Business Status and a Georgian tax-residency certificate. Founders unwinding Italian operating companies should add 3–6 months for Article 166 TUIR planning and pre-departure SRL restructuring through an EU holding regime. A January departure with the Tbilisi setup completed by March typically captures Italian non-residency from the same fiscal year, provided the 183-day Italian threshold is not crossed.
What if Italy disputes my exit?
The Agenzia delle Entrate may issue an avviso di accertamento asserting retained Italian residency under one or more limbs of Article 2 TUIR. Without the lista nera presumption, the Agenzia carries the ordinary burden, and a complete factual file (Georgian tax certificate, AIRE, lease, banking, schooling, days log, terminated Italian ties) typically wins on factual grounds at the Commissione Tributaria — or settles in adesione before reaching that stage. The Italy-Georgia DTT’s Article 4 tie-breaker is available as a backstop where the Agenzia argues a competing Italian residence in fact.
Next Step
For the full destination-side breakdown, see Tax-Free Residency in Georgia. For the broader exit framework across all major origin countries, see How to Legally Exit a High-Tax Country. The closest comparative reads on this corridor are Italy to Cyprus (the EU alternative with full Article 166 deferral and the non-dom regime) and Italy to Paraguay (the Latin American territorial corridor with the much harsher lista nera posture).
Book a free consultation — we specialise in Italy-to-Georgia relocations, AIRE planning at the Embassy in Tbilisi, Article 166 TUIR pre-departure restructuring, and Small Business Status setup with vetted Tbilisi-based counsel.
Last updated: 2026-04-27
Sources:
– Agenzia delle Entrate — Testo Unico delle Imposte sui Redditi (TUIR), Articoli 2, 24-bis, 73, 166 (https://www.agenziaentrate.gov.it)
– Ministero delle Finanze — Decreto Ministeriale 4 maggio 1999, lista degli Stati e territori a regime fiscale privilegiato per le persone fisiche (https://def.finanze.it)
– Convenzione tra Italia e Georgia per evitare le doppie imposizioni, firmata Roma 31 ottobre 2000, in vigore dal 19 febbraio 2008 (https://www.finanze.gov.it/it/Fiscalita-dell-Unione-europea-e-internazionale/convenzioni-e-accordi/convenzioni-per-evitare-le-doppie-imposizioni)
– Ministero degli Affari Esteri — AIRE registration procedures, Italian Embassy Tbilisi (https://ambtbilisi.esteri.it)
– Revenue Service of Georgia — Small Business Status and Individual Entrepreneur regulations (https://rs.ge)
– PwC Worldwide Tax Summaries — Italy and Georgia, individual taxes (https://taxsummaries.pwc.com)