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Tax Planning for Your Business in Iran

Tax Planning for Your Business in Iran

Two of the biggest tax concerns, as an entrepreneur in Iran, are usually paying less for taxes and reducing the administration personnel that is involved in paying them. Achieving these goals takes a bit of planning, something which our lawyers in Iran can help with. Although the tax system in Iran is quite dense and updated regularly, with our assistance, you don’t have to worry about calculating the taxes on your own or finding out the new legal provisions.

In Iran, according to the fiscal calendar, the year begins on 21st of March and it ends on March 20, the next year. The government institution that is authorized to levy and also collect taxes is the Ministry of Finance and Economic Affairs. 

Types of income which can be earned in Iran

There are no less than five categories of income which can be earned by individuals. Here is the list:

–    salaries,
–    windfall profits or incidental earnings,
–    income which is obtained from trades, professions and other miscellaneous sources,
–    income which is derived from agriculture,
–    real estate income.

As in many other countries, regarding the income consisted of salaries and benefits, the employer must make all the necessary tax deductions (from the employees’ payroll) and they need to be summited to the tax authorities. But there are some exemptions and deductions which are allowed. As an example, the individuals who are of Iranian nationality and are residents in Iran, are subject to tax on all of their income – whether it is earned abroad or in Iran.

Taxes regarding real estate

Beside the already mentioned taxes, there is an individual’s income tax and the land tax (unless the land is tax-exempt). Regarding real estate taxes, rental income is subject to taxation in Iran as well, but is exempted if the property is a residential one, leased as such and measures no more than 200 square meters (or 150 square meters if the property is located in Tehran). 

Corporate taxes regarding income

There has been an old corporation tax (rate 10%), with progressive rates between 12% and 54% on reserves and all distributable income. Now, there is a new corporation tax (flat rated) of 25% on the profits. Also, our attorneys in Iran mentioned that there is also a 0.3% Chamber of Commerce tax.

But remember, our Iranian lawyers are always here to help answer all of your questions regarding taxation and tax planning for opening a business. The experienced members of our law firm in Iran will offer you all the advice needed regarding tax planning for your business. Basically, with our help you won’t have to worry about who is going to organize the taxes, every time a new contract has been initiated. So, do not hesitate to contact us.