Tax Authority Orders Collection of Taxes Applicable to Expensive Cars

Nouraei & Mostafavi Law Offices – February 20, 2023- Tehran- Iran- In a circular letter, the Deputy of Tax Revenues of the Tax Affairs Organization of Iran has ordered all offices nationwide to collect the tax imposed on expensive cars. The circular letter is as follows:

Number: D/230/78272

Date: 01/12/1401 (20 February 2023)

To: All General Departments of Tax Affairs.

In line with the approvals of the Tax Revenue Headquarters, and since the departments had sent SMSs to all the owners of expensive cars subject to Paragraph SH of Note (6) of the National Budget law of 1400 (March 21, 2021- March 20, 2022) ), the General Departments of Tax Affairs are obliged to adopt administrative measures according to the respective regulations for collecting taxes from those owners who have not paid, or have not made payment arrangements, or have not protested against the tax.

Mohammad Taghi Pakdaman

Deputy of Tax Revenues

Nouraei and Mostafavi Law Offices draw your attention to the full text of the article referred to in Mr. Pakdaman’s circular letter here under.

Paragraph SH of Note 6 of the National Budget Law of the year 1400 (March 21,2021- March 20, 2022)

All owners (both natural and juridical persons) of passenger cars and double-cabin vans with personal police numbers registered in their name and their children under eighteen years of age and the depending incapacitated ones, whose total value at the end of the year 1400 (March 21, 2021- March 20, 2022) is more than ten billion (10,000,000,000) rials, are subject to annual car tax as follows:

1- Up to the amount of fifteen billion (15,000,000,000) rials for the excess of ten billion (10,000,000,000) rials, one percent 1%

  2- Up to the amount of thirty billion (30,000,000,000) rials for the excess of fifteen billion (15,000,000,000) rials, two percent 2%

3- Up to the amount of forty-five billion (45,000,000,000) rials for the excess of thirty billion (30,000,000,000) rials, three percent 3%

4- For the excess of forty-five billion (45,000,000,000) rials, four percent 4%

The basis for calculating the car tax is the daily market price of all types of cars according to the date of manufacture or import, which has been determined and announced by the Country’s Tax Affairs Organization until the end of the year 1399 (March 20, 2020- March 20, 2021).

For the types of cars which might be manufactured or imported after the announcement of the Organization, the mentioned basis will be set and announced by the said Organization immediately after their production or import. The Country’s Tax Affairs Organization must determine the subject assets and their value by the end of Khordad 1400 (June 21, 2022) at the latest, and inform the owners accordingly.

All natural and juridical persons are obliged to pay the annual tax for the cars under their possession or possessed by their children under eighteen years of age and dependent incapacitated ones by the end of Bahman 1400 (February 19, 2022) at the latest. It is prohibited to register the transfer of cars that should pay tax according to this paragraph before paying the car transfer tax liability, including the taxes related to the property (tax mentioned above), definitive transfer, and lease. Violators of the ruling of this paragraph are jointly responsible for paying the due tax.

The Ministry of Economic Affairs and Finance will prepare the implementation regulations of this paragraph to be approved by the Council of Ministers by the end of Khordad 1400 (June 21, 2022) at the latest.

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