Italy vs Georgia: Tax Comparison
Italy residents earning $400k face ~45.4% effective tax. Moving to Georgia (1% up to $165k) could save you $180,132 per year.
Best for: freelancers, small business owners, and digital nomads seeking ultra-low taxes with an extremely affordable cost of living
Tax Savings at Every Income Level
Side-by-side comparison of annual tax paid in Italy vs Georgia (all amounts in USD).
| Annual Income | Italy Tax | Georgia Tax | Annual Savings |
|---|---|---|---|
| $100,000 | $43,182 (43.2%) | $1,000 (1%) | +$42,182 |
| $150,000 | $66,282 (44.2%) | $1,500 (1%) | +$64,782 |
| $200,000 | $89,382 (44.7%) | $1,650 (0.8%) | +$87,732 |
| $300,000 | $135,582 (45.2%) | $1,650 (0.6%) | +$133,932 |
| $400,000 | $181,782 (45.4%) | $1,650 (0.4%) | +$180,132 |
Side-by-Side Comparison
| Category | Italy | Georgia |
|---|---|---|
| Tax System | Progressive | 1% up to $165k |
| Effective Rate ($400k) | 45.4% | 0.4% |
| Capital Gains Tax | Yes | None |
| Monthly CoL (mid-tier) | $3,000 | $1,600 |
| Min Residency Stay | — | 183 days/yr |
| Visa Complexity | — | 2/10 |
| English Literacy | — | 4/10 |
Why People Move from Italy to Georgia
At $400,000 annual income, Italy residents pay approximately $181,782 in taxes. Relocating to Georgia reduces this to $1,650, a saving of $180,132 per year.
Cost of living is also lower: Georgia costs approximately $1,600/month compared to $3,000/month in Milan / Rome, saving an additional $16,800 per year.
English accessibility in Georgia is moderate (4/10). Learning the local language (Georgian) will improve your experience.
Leaving Italy: What to Know
Tax Departure Rules for Italy
Italy imposes an exit tax on unrealised gains for individuals holding substantial shareholdings (≥2% in listed companies or ≥5% in unlisted companies) who transfer residence to a non-EU/EEA country. For moves within the EU/EEA, payment can be deferred in instalments.
Capital gains considerations: Italy taxes capital gains on financial assets at 26% (12.5% for government bonds). Non-residents are generally only taxed on Italian real estate gains and gains from substantial shareholdings in Italian companies.
Practical steps when leaving: Deregister from AIRE (Registry of Italians Abroad) or cancel your residence permit, file a final tax return with Agenzia delle Entrate, and notify INPS of your departure. Italian healthcare (SSN) coverage ends upon deregistration.
Living and Working in Georgia
Georgia Tax System
Georgia's Individual Entrepreneur Small Business Status offers just 1% tax on gross revenue up to approximately $165,000. Foreign-sourced income for standard residents is not taxed, creating a potential 0% effective rate for remote workers.
Lifestyle in Georgia
Tbilisi offers an affordable, culturally rich lifestyle with growing digital infrastructure. The city has become a popular hub for digital nomads thanks to extremely low costs and a welcoming 1-year visa-free stay for most nationalities.
Getting started: Register as an Individual Entrepreneur (IE) at the Revenue Service — the process takes about 1 day. You'll need a Georgian bank account (TBC Bank or Bank of Georgia are popular) and a registered address.
Net financial benefit: After accounting for both tax savings ($180,132/yr) and cost of living differences (+$16,800/yr), relocating from Italy to Georgia produces a net annual benefit of approximately $196,932 at $400,000 income.
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Frequently Asked Questions
How much tax would I save moving from Italy to Georgia?
At a $400,000 USD annual income, moving from Italy to Georgia could save approximately $180k per year in taxes. Italy has an effective tax rate of ~45.4% at this income level, while Georgia charges 1% up to $165k. Actual savings depend on your income type, deductions, and residency status.
What is the tax rate in Georgia?
Individual Entrepreneur Small Business Status: 1% on gross revenue up to ~$165k. Must register a Georgian entity.
What is the cost of living in Georgia compared to Italy?
A mid-tier lifestyle in Georgia costs approximately $1,600/month, compared to $3,000/month in Milan / Rome. That's $1,400 cheaper per month, or $16,800 savings per year.
Do I need a visa to live in Georgia?
Visa-free for 1 year for most nationalities. Easy residency permit. 183 days for tax residency. Foreign-sourced income untaxed at standard residency.
What are the steps to leave Italy for tax purposes?
Deregister from AIRE (Registry of Italians Abroad) or cancel your residence permit, file a final tax return with Agenzia delle Entrate, and notify INPS of your departure. Italian healthcare (SSN) coverage ends upon deregistration. Italy has extensive social security agreements with all EU/EEA countries, plus bilateral treaties with the US, Canada, Australia, Argentina, Brazil, and many others.
What happens to my Italy pension if I move to Georgia?
Italian state pension (INPS) requires a minimum of 20 years of contributions for an old-age pension. Pensions are payable worldwide and subject to bilateral tax treaty provisions. Italy has a 7% flat tax regime for foreign pension income received by new residents of Southern Italian regions.
Will I pay capital gains tax when leaving Italy?
Italy taxes capital gains on financial assets at 26% (12.5% for government bonds). Non-residents are generally only taxed on Italian real estate gains and gains from substantial shareholdings in Italian companies. Italy imposes an exit tax on unrealised gains for individuals holding substantial shareholdings (≥2% in listed companies or ≥5% in unlisted companies) who transfer residence to a non-EU/EEA country. For moves within the EU/EEA, payment can be deferred in instalments.
How do I set up banking in Georgia as an expat from Italy?
Georgian banks offer easy account opening for foreigners with just a passport. Both TBC Bank and Bank of Georgia have excellent English-language mobile apps.
Who is the Italy to Georgia move best suited for?
This relocation route is ideal for freelancers, small business owners, and digital nomads seeking ultra-low taxes with an extremely affordable cost of living. At a $400,000 annual income, the tax savings alone amount to $180,132 per year compared to staying in Italy.