Tax in Iran

Who is the tax authority?

Iran's tax system is administered by INTA — the Iranian National Tax Administration (Sazman-e Omur-e Maliati) — under the Ministry of Economic Affairs and Finance.

The primary legislation is the Direct Taxes Act (DTA), as repeatedly amended since its 1966 origin. Practitioners often abbreviate it DTA; note the acronym also means Double-Tax Agreement in other contexts — these are distinct instruments.

INTA handles registration, returns, audits, and appeals for both individuals and legal entities. A separate Tax Court system (Heyat-e Hal-e Ikhtilafat-e Maliati) hears contested assessments.

What is the tax year and when are returns due?

Iran follows the Solar Hijri (Shamsi) calendar. The fiscal year runs from Farvardin 1 to Esfand 29 — roughly March 21 to March 20 of the following Gregorian year.

The current Iranian year 1404-1405 spans approximately March 21, 2025 to March 20, 2026. Individual PIT returns for salaried employees are handled through employer monthly withholding; self-employed individuals file annually by Khordad 31 (roughly June 21). Corporate income tax returns are due four months after fiscal year-end.

Who counts as an Iranian tax resident?

Under the Direct Taxes Act, a person is resident in Iran if they are physically present in Iran for six months or more in the fiscal year. Domicile (permanent home) is an additional basis for residence.

Residents are taxed on worldwide income. Non-residents are taxed only on Iranian-source income. Iran does not operate a territorial system for residents.

Iranian nationals working abroad typically retain ties to the Iranian fiscal system. Dual nationals face complexity where both Iran and a second country assert residency — qualified cross-border Tax-Advisers in both jurisdictions are necessary to navigate this.

What are the personal income tax rates?

Iran uses a progressive rate structure under the Direct Taxes Act. Employment income is subject to monthly withholding by the employer; self-employed individuals compute and remit annually.

The salary exemption threshold for Iranian year 1404-1405 is approximately IRR 144 million per year (verify the exact current figure on the INTA portal before filing, as the threshold is updated by annual budget law).

How does corporate tax work?

Iran's standard corporate income tax (CIT) rate is 25% on net taxable profit, under Article 105 of the Direct Taxes Act.

Iran's oil and gas sector operates under separate fiscal arrangements distinct from the standard 25% CIT. Withholding tax applies to non-resident-source income under various articles of the DTA.

Iran is not a member of the OECD Inclusive Framework and has not adopted the GloBE Pillar Two global minimum tax. Entities with operations in Pillar Two jurisdictions must verify whether those foreign rules impose a top-up obligation on Iranian profits.

What about VAT and other indirect taxes?

Iran introduced the VAT Act in 2008. The current standard rate is 9%, covering most goods and services. Exports are zero-rated. Certain essential goods, agricultural inputs, and financial services carry exemptions.

VAT-registered businesses submit quarterly returns. Iran also operates a range of municipal levies, customs duties, and sector-specific imposts. Stamp duty applies to certain commercial contracts and real-estate transfers.

Currency and exchange rate context

Iran's official currency is the Iranian Rial (IRR). The colloquial unit is the Toman — 1 Toman equals 10 Rials. Most Iranians price goods and transactions in Tomans; official financial documents use Rials.

How are cryptoassets treated?

Iran authorised and licenced cryptoasset mining for approved operators in 2019, primarily as a mechanism to monetise subsidised electricity. The Central Bank of Iran (CBI) has restricted the use of crypto for foreign payments and cross-border settlement.

Cryptocurrency trading remains in a legally uncertain zone; the Direct Taxes Act does not include explicit crypto-gain provisions. Where declared, gains are treated under existing income-tax categories.

What is the sanctions context?

Iran has been subject to US OFAC sanctions since 1979 and EU sanctions since 2010-2012. UN Security Council sanctions have also been in place in various forms. These sanctions restrict financial transactions, banking, trade, and professional-services engagements for parties in OFAC-jurisdiction countries.

The existence of bilateral double-tax agreements does not override sanctions restrictions. Treaty relief may be formally available but operationally inaccessible due to payment-channel restrictions.

What is the treaty network?

Iran has concluded approximately 50+ bilateral double-tax agreements. However, practical operability is constrained by the sanctions environment. Key treaty partners include Russia, China, Turkey, Belarus, Armenia, Azerbaijan, Indonesia, Pakistan, South Africa, Germany, France, and Spain.

Critically, Iran has NO bilateral double-tax treaty with the United States and NO treaty with the United Kingdom. Iranian-Americans and Iranian-Britons cannot rely on treaty relief to reduce withholding or resolve dual-residence.

Iran has not signed the OECD Multilateral Instrument (MLI) and is not a member of the OECD Inclusive Framework. Treaty application relies on bilateral texts only.

Where does Iran sit in the Middle East cohort?

Iran anchors the sanctions-affected / restricted-DTA archetype alongside Cuba and North Korea in the global taxonomy — jurisdictions with formal treaty networks whose practical reach is heavily constrained by multilateral sanctions regimes. Within the Middle East, Iran sits in a distinct sub-archetype from the Gulf states.

Common pitfalls and complexity factors

Engaging with the Iranian tax system — whether as a resident, a diaspora taxpayer, or a foreign investor — involves several recurring complexity points:

Meet an Iran-resident taxpayer

Meet an Iranian diaspora taxpayer

When should a situation involve a qualified Tax-Adviser?

Some situations in Iran are straightforward enough to handle through INTA's e-filing portal. Others involve significant complexity:

• Dual nationals or diaspora Iranians with income in both Iran and a second country (particularly US, UK, Germany, Canada)
• Self-employed individuals with multiple income streams across sectors with different rates or withholding obligations
• Corporate entities considering free-zone registration or operating across both free-zone and mainland Iran
• Any party receiving a INTA notice of assessment, audit query, or penalty notice
• Businesses with non-resident shareholders or payments to non-resident service providers (withholding obligations)
• Any situation involving cross-border payments where sanctions-compliance obligations may intersect with tax-compliance obligations

A qualified Iranian Tax-Adviser registered with INTA is the starting point for residents. Diaspora situations typically need a Tax-Adviser in the diaspora country as well.

This page contains general reference information. It is not personal guidance for any specific situation. Tax rules change. Always verify current figures on the INTA website or with a qualified practitioner before filing.