Tax
Direct Taxes Act, VAT, and a large exempt religious-endowment sector
The Direct Taxes Act governs income and corporate tax, with a 25 per cent corporate rate. VAT applies under the 2008 Act as amended in 2021. Religious levies are collected outside the tax system.
Key rules
- Jurisdiction — National, administered by the Iranian National Tax Administration.
Governing law
- Direct Taxes Act 1366/1987, as substantially amended in 1394/2015
- Value Added Tax Act 1387/2008, replaced by the VAT Act 1400/2021
In practice
Corporate income tax is a flat 25 per cent on assessed profit; individual income tax is progressive. The 2015 amendments moved assessment toward audited accounts and away from the negotiated presumptive assessments that characterised earlier practice. VAT applies at a standard rate with a broad list of exemptions. Two features matter for comparison: substantial statutory exemptions for religious endowments and certain state-linked foundations remove a large part of economic activity from the corporate tax base, and Iran's treaty network is limited, so double taxation relief often depends on domestic credit rules.