Capital Gains Taxation in Iran, Islamic Republic of
Definition of Capital Gains
In Iran, capital gains are defined as the profit realized from the sale or disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains are taxed at a flat rate of 25%. However, certain capital gains may be exempt from taxation, such as gains from the sale of a primary residence or gains from the sale of assets held for more than five years.
Legal Framework
The taxation of capital gains in Iran is governed by the following laws:
- Article 138 of the Tax Code of Iran
- Article 139 of the Tax Code of Iran
Legal Reasoning and Policy Objectives
The Iranian government's policy objectives for taxing capital gains include:
- Generating revenue for the government
- Ensuring that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
- Promoting investment and economic growth
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