Value Added Tax in Iran
The Iranian Value Added Tax or (“VAT”) provisions, has been regulated under the VAT Act approved on May 22th, 2008 (the “Act”) which consists of 9 chapters as follows:
Chapter 1: Generalities and definitions;
Chapter 2: Exemptions;
Chapter 3: Base, rates and manner of computation of tax;
Chapter 4: Duties and obligations of taxpayers;
Chapter 5: Value Added Tax Organization, duties and powers;
Chapter 6: Other Regulations;
Chapter 7: Goods and Services Tax;
Chapter 8: Importation Duties; and
Chapter 9: Other Taxes and special Excises.
In accordance to the Act, the provisions are applicable on the sale of all goods and services and their imports, except 17 items listed in Article 12 of the Act as the exempted ones, such as: unprocessed agricultural products, all kinds of fertilizers, pesticides, seeds and seedlings, Immoveable properties, etc.
It is also worthy to mention that the economic activities in free trade and industrial zones are exempted from the VAT (Value Added Tax).
The Act, however, does not include the export of goods and services through official Customs. Therefore, the taxes paid for the export of goods and services will be refundable by submitting the Customs clearance and valid documentations.
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