Etsy and sole proprietorships in Georgia: how to sell on Etsy, accept payments via Payoneer, and pay 1% tax

If you want to sell on Etsy from Georgia, Etsy Payments is now supported for sellers in Georgia through a partnership with Payoneer, which means that the process of accepting and withdrawing payments has become easier. However, you still need to take into account: Etsy fees (listing + transaction + processing), Payoneer fees/conversion, and the tax regime in Georgia (for small businesses, 1% of turnover if the limit is observed).

Why you should register as an individual entrepreneur in Georgia if you sell on Etsy

• It’s legal and transparent. Registering as an individual entrepreneur (IE) simplifies banking operations, cooperation with payment providers, and reporting to the tax authorities.
• Tax benefits for small sellers. Small businesses in Georgia are eligible for a 1 % tax on turnover (subject to turnover thresholds and rules). This is often more advantageous than the usual scheme for small artisans.

Briefly about Etsy payments and why Georgia ↔ Payoneer is important

• Etsy Payments is the main payment acceptance mechanism. For a number of countries (including Georgia), Etsy implements payment acceptance through partners; for Georgia, this is implemented through integration with Payoneer — the seller registers with Etsy Payments and in the process links their Payoneer Payment Account.
• What this gives sellers in Georgia is the ability to accept payments from buyers via credit cards and other methods, receive deposits in USD on Payoneer, and then withdraw them in local currency or transfer them to a Georgian bank account.

The main fees that eat into your income on Etsy

• Listing fee: a fixed fee for creating/updating a listing (usually $0.20 per listing).
• Transaction fee: a percentage of the sale amount; in 2025, this is 6.5 % of the total amount (item price + shipping + options). This is a fixed amount that Etsy retains.
• Payment processing fee (Etsy Payments / Payoneer, etc.): additional percentage + fixed fee for payment processing — the amount depends on the country and currency.
• Payoneer withdrawal/conversion fees: when transferring from your Payoneer USD balance to a local account, there will be a conversion fee/margin and a possible fixed fee charged by the receiving bank.

Total: between the “price in the store” and “what will be credited to the card,” the following will be deducted: listing fee + 6.5 % transaction fee + processing fee + Payoneer withdrawal/conversion fees + possible incoming bank fees. Always do a test transaction and keep a record of it.

Step‐by‐step guide: from registering as an individual entrepreneur to your first sale and payment

Step A — Register as an individual entrepreneur (IE) in Georgia

1. Submit an application at the Public Service Hall (or through a representative/intermediary). You will need your ID/passport and address; the process is usually quick.
2. Choose the correct activity codes (OKED) — indicate that you are engaged in trade/crafts/online sales (so as not to lose your right to the 1 % regime).

Step B — apply for Small Business Status (1 %)

Check the current limits and criteria (turnover threshold) and submit an application to the Revenue Service. If you meet the criteria, you will pay 1 % tax on your turnover (within the limit).

Step C — Open a Payoneer account and link it to Etsy

Create a Payoneer account (if you don’t already have one) — you will need it to enable Etsy Payments in Georgia (Etsy will ask you to connect to Payoneer when you register for Etsy Payments). Verify your identity (KYC).

Step D — Open a shop on Etsy and connect Etsy Payments

Open a shop on Etsy, specify the country (Georgia) and fill in the shop details. If your country is supported for opening a shop, when you connect Etsy Payments, you will be offered to register/link with Payoneer. (If the country is not shown during registration, it means that access is restricted for new registrations; but in 2025, Etsy expanded the list and Georgia is now included.)

Step E — Test listing and test withdrawal

Create 1-2 listings, sell a test order (you can do an offline transaction through a relative), then wait for the deposit on Payoneer → withdraw a small amount to your local card/account to measure: how much came in, what fees and time.

Step F — keep records and submit reports

Keep a table: date of sale, amount in listing currency, listing fee, transaction fee (6.5 %), payment processing fee, amount on Payoneer, withdrawal fees, and total in GEL (at the withdrawal rate). This will allow you to correctly calculate the 1 % tax and have proof for verification.

Practical tips for minimizing losses

• Listings in a convenient currency. If Etsy allows it, choose a listing currency that minimizes double conversion (if you are paid in USD and Payoneer holds USD, it is better to list in USD).
• Test transfers. Always do a test for $20—50: this will give you a realistic picture of fees and time.
• Build in a margin. Include in your price calculation: $0.20 listing + 6.5 % transaction + processing fee (country‐dependent) + ≈2—3 % spread/conversion + possible bank fees.
• Compare withdrawal alternatives. Sometimes it is more profitable to leave money on Payoneer and spend it from your Payoneer card than to withdraw it to a bank with a large incoming fee.

Taxes and reporting — what’s important to consider

• 1 % regime (Small Business). If you qualify as a small business in Georgia, the tax is 1 % of turnover (with a threshold on annual revenue — see requirements). Check the current limits and exceptions (in 2025, updated limits and rules for types of activities were discussed).
• Currency accounting. Income from Etsy is usually in USD — for tax purposes, you convert it to GEL at the exchange rate on the date of receipt/withdrawal according to accounting rules; keep Payoneer statements and SWIFT notifications.
• Other obligations. Social security contributions and other payments depend on your income structure and status — consult with an accountant before filing your first tax return.

Quick checklist of things to do right now

• Register as an Individual Entrepreneur (IE) at the Public Service Hall.
• Check your eligibility and apply for Small Business Status (1 %).
• Create a Payoneer account and complete verification.
• Open a shop on Etsy and connect Etsy Payments → link Payoneer.
• Make a test order/withdrawal ($20–$50) and record the actual fees/exchange rate.
• Set up a payment spreadsheet and arrange with an accountant to file your tax return.

Common mistakes made by novice sellers on Etsy from Georgia

• Did not test withdrawals and was surprised by hidden fees. (A test withdrawal solves the problem.)
• Incorrectly specified activity codes and lost the right to the 1 % rate. (Select the correct OKED.)
• Ignored listing/transaction/processing fees — resulting in zero margin. (Plan your price taking all fees into account.)

Conclusion

Selling on Etsy from Georgia is now quite realistic and convenient: Etsy Payments is available to sellers in Georgia through Payoneer, and the local tax regime (1% for small businesses, subject to conditions) makes it economical to legalize income. The main thing is to set up Payoneer ↔ Etsy correctly, conduct test withdrawals, and keep accurate currency records for tax purposes.