Iran Tax Code (English)
DIRECT TAXATION ACT
Book I — Persons Liable to Taxation
Article 1: The following shall be liable to the payment of income tax:
1. All proprietors, both natural persons and legal entities, in respect of their property and estate in Iran, according to the regulations of Book II hereof.
2. Every natural person, of Iranian nationality, residing in Iran, in respect of all his income earned in Iran or abroad.
3. Every natural person, of Iranian nationality, residing abroad, in respect of all his income earned in Iran.
4. Every juridical entity of Iranian nationality, in respect of all her income earned in Iran or abroad.
5. Every non-Iranian person (both natural and juridical), in respect of the income earned in Iran as well as in respect of the income collected from Iran, pursuant to the grant of a license or other rights, providing training and technical assistance and/or transfer of movie films (paid in the form of staging fees or under any other titles).
Article 2: The following juridical entities shall not be liable to the payment of income tax
prescribed herein:
1. The ministries and government institutes
2. The organizations and bodies whose budget shall be provided by the government.
3. The municipalities
Note 1: Concerning the companies whose capital shall totally or partially be owned by the juridical entities and/or the institutes mentioned above, their share of the income or profit shall not be subject to the provisions made in Article 2 above. However, the provisions made in the present Note shall not deny such companies the exemptions prescribed in the present Act, as the case maybe.
Note 2: The income which shall be earned by the legal entities mentioned in Article 2
above, through economic activities and operations including industrial, mine,commercial, trade, services and other industrial production activities, as a result of the activities other than the ones described in the company’s objectives, shall be taxable at the rate stipulated in Article 105 of the present Act, as the case may be. ‘The officials and authorities in charge of such affairs shall be duty-bound, under the circumstances mentioned above, to discharge the relevant duties and obligations as per the provisions made in the present Act. Otherwise, such officials and the taxpayers concerned shall jointly he responsible to pay the applicable taxes.
Note 3: As for the cases already authorized by tile Late Imam Khomeini or the Supreme Leader of Islamic Republic of Iran, the tax exemptions prescribed in Article 2 above shall be approved and confirmed by the Supreme Leader of IRI.
2
Book II — Tax on Property
Chapter 1: Annual Tax on Real Estate
Articles 3 to 9: Deleted.
Chapter 2: Tax on Uninhibited Housing Real Estate
Articles 10 and 11: Deleted.
Chapter 3: Tax on Undeveloped Lands
Articles 12 to 16: Deleted.
Chapter 4: Inheritance Tax
Article 17: Property left after the death, actual or presumed, of a person shall be liable to taxation in the following manner:
1. If the deceased or heirs, or both of them shall be Iranian nationals domiciled in Iran, in respect of the inheritance Portion of any one of the heirs in the property liable to inheritance tax (described in Article 19 below) existing in Iran or abroad, after deduction of the death duty paid on the property to the Foreign government where the property exists, at the rates specified under Article 20 below.
2. If both the deceased and the heirs shall be Iranian nationals domiciled abroad, the rates for the inheritance portion of any one of the heirs in that part of the estate and financial rights existing in Iran shall be twenty live percent (25%), after deducting the death duty paid to the government of the country where the property exists.
3. In the case of foreign nationals and all other cases, in respect of the part of the estate and financial rights existing in Iran, the rates shall generally be the ones specified in Article 20 below for heirs of second degree.
Article 18: For the purpose of the present Act, the heirs shall be divided into three
categories as follows:
1. Heirs of’ first degree, namely: father, mother, wife, husband, children and grandchildren.
2. Heirs of the second degree, namely: grandparents, brothers, sisters and their children.
3. Heirs of third degree, namely: paternal and maternal uncles, paternal and maternal aunts and their children.