Accounting Outsourcing and
Tax compliance in Iran

Iran – Accounting Outsourcing and Tax Compliance

Global Expansion Plus provides accounting outsourcing and tax compliance in Iran. We provide services with the support of our local accountants and tax specialists. We will perform bookkeeping, accounting, and filing a tax return on your behalf bearing all associated compliance risks. Every state will put in place a tax system to raise revenue. Iran is no different. Whether a resident or a non-resident, individual or corporate, there is the need to understand taxation in Iran. Otherwise, you are bound to get on the wrong side of the law.

Iran in facts

  • Location: Middle East
  • Territory: 1,648,195 square kilometers
  • Capital: Tehran
  • Official language: Persian
  • Currency: Rial (IRR)
  • Population: 83,18 million

Corporate income tax (CIT) in Iran

Corporate income tax is regulated by the Iranian Direct Taxes Acts (DTA).
Corporat income tax is 25% of net income earned by the companies that are locally registered or non-resident. Net profit is calculated as accumulated income minus all associated tax-deductable exenses, minus tax experts, and tax incentives.
Non-profit organizations are tax-exempt, but if they start a for-profit activity, these activities are taxed at the rate of 25%.
Companies like cooperative unions and cooperatives are subject to the tax allowance of 25% from the standard 25% CIT tax.

Value-added Tax (VAT) in Iran

VAT is regulated by the Iranian National Tax Administration (INTA). All companies shall register a VAT taxpayer. Transactions involved in the production and distribution of goods and provision of services as well as import, export operations are subject to VAT.
The VAT rate in Iran is 9%. This 9% consists of a 6% VAT tax and a 3% excise tax of municipalities. Some categories of goods have special VAT rates:
  • Tobacco product and cigarette are taxed at 12% VAT;
  • Oil and gas products including kerosene are taxed at 20% VAT;

For the mentioned above, product special municipal taxation is apples:

  • Tobacco product and cigarette are subject of 10% additional municipal tax;
  • Fuel and kerosene are subject of 10% additional municipal tax;
  • Mazut is subject to an additional tax of 5%.

Personal Income tax (PIT) in Iran

Individual Business Tax

Income earned by the physical person from professional activity or any other form of income is taxed under the Direct Taxes Act of Iran. Tax Act, especially identities income earned from sole entrepreneurship. Individual Business income derived from the partnership is also subject to PIT.
Individuals are required to submit an IBT return to the authorities. Such individuals are required to have accounting books to record transactions.
IBT is charged on a progressive scale that depends on the amount of the annual income:
  • Income up to IRR 500 million is taxed at 15%;
  • Income between IRR 500 and 1000 million is taxed at 20%;
  • Income over IRR 1000 million is taxed at 25%;

Payroll-Related Taxation in Iran

Employment income in Iran is subject to the personal income tax on a progressive scale. The rate is applied to the gross salary minus allowance provided by the government budget as an incentive. Incentives are provided on an annual basis.
  • Under IRR 276 million - 0%
  • IRR 276 – 1,104 million - 10%
  • IRR 1,104 – IRR 1,380 million - 15%
  • IRR 1,380 – IRR 1,932 million - 25%
  • Over IRR 1,932 million - 35%
A company making payment to individuals that are not employees of the company is subject to a 10% withholding tax paying to the budget from the amount. Such payments may be consultation, lecturing, and teaching, study, and research fees.

Benefits in kind

It is common in Iran to provide additional benefits in kind to a valuable employee. The employer pays the following tax on behalf of an employee as a form provided benefits in the form:
  • House or apartment with furniture and fixtures – 25%;
  • House or apartment without furniture and fixtures – 25%;
  • Driver with an office vehicle – 10%;
  • A car without a driver – 5%;

Import/ Export related taxation in Iran

Custom duty

Iran imposes different custom duties depending on the product and its category. On average, applied custom duty equals to 30% of the fair value of goods on CIF terms. Some strategic products are taxed at a 0% rate, while some products are subject to 100% customs duty.
It needs to be mentioned that products against Islamic values are not allowed to enter the Republic, which includes alcohol and all other related products.
Закрыть меню

REQUEST A CONSULTATION

Close Panel
2020 © Global Expansion Plus