The law to exempt import of pharmaceutical raw materials, powdered milk and medical equipment from paying value-added tax has passed

Nouraei & Mostafavi Law Offices -18 January 2023- Tehran- Iran- Speaker of the Iranian Majlis (parliament) has notified the Iranian president to implement a newly passed legislation, the Official Gazette ran the law text today.

The law, passed on 23/9/1401 (14 December 2022), exempts the import of pharmaceutical raw materials, powdered milk, and medical equipment from payment of value-added tax and levies.

The full text of the law is as follows:

Single article – Import of pharmaceutical raw materials, raw materials for producing infant powdered milk, consumable items in the fields of medicine and rehabilitation including work tools, raw materials, and production parts as well as equipment spare parts not identical to domestic products, is exempted from payment of value-added taxes and levies at the customs entry points as of the start of the Persian year of 1401 (21 March 2022). The exemption, however, will only be made upon permission from the Ministry of Health, Treatment and Medical Education and the approval of the Ministry of Industry, Mining and Trade.

Note 1- In case of lack of confirmation for the use of the mentioned imported goods in the pharmaceutical and medical equipment industries, or failure to upload the identification of the items in the final product manufactured from the raw material in the “Authenticity Tracking and Control System” subject of Clause “P” of Article (7) of the Law the of Permanent Decrees of the Country’s Development Plans approved on 10/11/1395 ( 29 January 2017), the said import shall be subject to taxes and levies at the rate stated in Article (7) of the Value Added Tax Law approved on 2/3/1400 ( 23 May 2023 ). The Ministry of Health, Treatment and Medical Education is obliged to inform the Iranian National Tax Administration about the tax and levies subject of this note.

Note 2- The decision to import the mentioned goods in case of need due to a shortage in domestic production proportionate to the market needs will be made by Ministry of Health, Treatment and Medical Education and approved by the Ministry of Industry, Mining and Trade in compliance with the Law of Maximum Use of the Production and Service Capacity of the Country and Support of Iranian Goods approved on 15/2/1398 ( 5 May 2019) and inclusion of value-added tax at the rate of two percent (2%) at the customs entry points.

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