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Inactive months: file zero, revoke status, or deregister?

March 25, 2026 · 5 min read

Three options for SBS holders with a quiet stretch after Order N38. A simple decision tree to pick the right one for your situation.

Updated 10 October 2026: clarified the zero-tax fine exception, cancellation timing and reapplication rules. The original publication date is retained.

Why this post

Since Order N38 came into force in March 2026, skipping a monthly declaration is no longer treated as filing a zero. If you’re an Individual Entrepreneur with Small Business Status (SBS) and you have a quiet month — or a quiet stretch — there are three legitimate options, not one.

A zero return is still required while the filing obligation applies. But Tax Code Article 274(3) excludes the late-filing fine under that article when the tax payable on the return is zero. Do not confuse the filing duty with an automatic monetary fine.

This is a practical summary, not legal advice. Always confirm with your accountant or the official sources.

The three options

Option 1: File a zero monthly declaration

This is the default and the simplest.

  • You stay in SBS.
  • Your SBS status continues; confirm the applicable rate and income eligibility when earnings resume.
  • For each genuinely zero-income month, you file a zero declaration after checking your records.
  • A zero month does not reset the annual turnover already accumulated.

Use this when you expect to have income again soon — within a few months — or when the cost of switching status is bigger than the cost of a 30-second monthly filing.

Option 2: Request revocation of your Small Business Status

You ask the Revenue Service to remove your SBS while keeping your PE registered.

  • Your PE stays. Income outside SBS follows the applicable ordinary rules; it is not automatically all taxed at 20%.
  • Instruction 12(6), as amended by Order N38, provides for a renewed application from the tax year following cancellation. Confirm the recorded ground and date with RS; re-grant is not automatic.
  • For cancellation at your request, Instruction 14(2¹) makes cancellation effective from the first day of the following month. Do not stop filing merely because you submitted the request; final and annual obligations may remain.

Use this when you genuinely want to pause SBS-style monthly filings, you know you won’t need the 1% rate for the rest of this calendar year, and you’re fine being back on the standard regime if income returns earlier than expected.

Option 3: Fully deregister your PE

You cancel your Individual Entrepreneur registration.

  • Confirm deregistration and the final SBS reporting period; closure does not erase past returns, debts or other remaining duties.
  • If you want to be a PE again later, you go through registration again.
  • Consider this when ending your Georgian business. Leaving Georgia alone does not settle the tax and registration steps.

Use this when you are sure you don’t want to be a PE anymore. It’s the strongest of the three options.

A simple decision tree

Ask yourself in order:

  1. “Will I have any PE income in the next 3–6 months?”

    • Likely yes → Option 1 (file zero each month).
    • Not really → continue to question 2.

  2. “Do I want to come back to SBS this year?”

    • Yes → Option 1 while you confirm the reapplication timing with RS before requesting cancellation.
    • No → continue to question 3.

  3. “Am I staying a PE at all?”

    • Yes, but not SBS → Option 2 (revoke status, keep PE).
    • No → Option 3 (deregister).

If you’re unsure and the SBS filing obligation still applies, keep filing accurate returns while you confirm the status decision.

Common edge cases

“I’ll be travelling for two months — should I revoke SBS?”

A short break can fit Option 1. Arrange reminders or your chosen filing workflow, confirm that each month really has no income, and keep the accepted returns. Travel and work-permission questions need a separate check.

“I have no income for the rest of the year and I’m thinking about closing the PE next year anyway”

Compare Options 2 and 3 with RS or your adviser. A cancellation request does not stop filing immediately; confirm its effective date and the final returns before ending your routine.

“I earned over the GEL 500,000 limit and my SBS was revoked — when can I re-apply?”

Check the cancellation ground first: one threshold crossing does not by itself establish the specified two-calendar-year cancellation test. For cancellation under Instruction 18(1)(b), same-year re-grant is expressly barred; Instruction 12(6) provides for a renewed application from the following tax year. Order N38.

“I closed my PE last month — do I still owe a monthly declaration?”

Check the effective deregistration date and your final reporting period with RS. A return for the last active month and outstanding liabilities can remain due after closure.

How Taxocat helps

If you stay in Option 1, Taxocat keeps your monthly rhythm boring on purpose:

  • Once you file with Taxocat, a month without income stays in the timeline with its deadline — you can see at a glance whether March was zero or just unfiled.
  • “Declare zero income” files it with zero income: automatically through rs.ge, or marked as filed if you submitted it yourself.
  • Nothing is filed on its own: each zero month is sent only when you confirm it.

For Option 2, request SBS cancellation through RS. For Option 3, cancel the IE registration through the National Agency of Public Registry, then confirm remaining tax returns and liabilities with RS. Stopping Taxocat does not perform either procedure.

See also:

Official sources