Taxation of Cryptocurrencies in Iran, Islamic Republic of
1. Classification of Cryptocurrencies for Tax Purposes
In Iran, cryptocurrencies are not explicitly defined or regulated under tax law. However, the Iranian Tax Organization (ITO) has issued guidelines that classify cryptocurrencies as "digital assets" for tax purposes. This classification means that cryptocurrencies are treated similarly to other intangible assets, such as stocks or bonds.
2. Calculation of Tax Liabilities on Cryptocurrencies
Tax liabilities on cryptocurrencies in Iran are calculated based on the gains or profits realized from cryptocurrency transactions. The following methodologies are used to determine taxable events and calculate tax obligations:
- Capital Gains Tax: Gains from selling or exchanging cryptocurrencies are subject to capital gains tax. The taxable gain is calculated as the difference between the selling price and the acquisition cost of the cryptocurrency.
- Income Tax: Mining cryptocurrencies is treated as income and is subject to income tax. The income derived from mining activities is included in the taxpayer's total taxable income.
- Value-Added Tax (VAT): Transactions involving the use of cryptocurrencies to purchase goods or services may trigger VAT if the value of the cryptocurrency has increased since acquisition.
3. Applicable Tax Rates
The tax rates applicable to cryptocurrency transactions in Iran vary depending on the nature of the transaction and the taxpayer's status. The following tax rates apply:
- Capital Gains Tax: The capital gains tax rate for individuals is 10%.
- Income Tax: The income tax rate for individuals ranges from 15% to 35%, depending on the taxpayer's income level.
- VAT: The standard VAT rate in Iran is 9%.
4. Legal References
The taxation of cryptocurrencies in Iran is primarily governed by the following legal provisions:
- Article 148 of the Direct Tax Law: This article provides the general framework for the taxation of income from digital assets, including cryptocurrencies.
- Circular No. 97/146000: This circular issued by the ITO provides specific guidelines on the taxation of cryptocurrencies.
If delving into the depths of Iranian tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
