To Encourage More Investment, Stocks Sale Tax Reduced

Back -15 September 2018- Tehran-According to the online news platform “Eghtesad Online”, the Tax Affairs Organization in line with the decree of the Supreme Council for Economic Coordination, reduced the tax rate for stock pre-emptive right from 0.5% to 0.1 %. The decree of the session of the Supreme Council for Economic Coordination was notified in a circular by the Iranian National Tax Administration as follows:
A. For directing cash flow to the capital market, financing some of the new investments and encouraging investors to participate more actively in the stock exchange through decreasing the transaction cost of stocks and stock pre-emptive right, it was determined that in the year 1397 (2018-2019) the rate of the tax for stock sale and stock pre-emptive right shall be reduced from 0.5 % to 0.1 % of the value of stock sale and pre-emptive right.
B. For encouraging more investment by the companies and persuading them not to distribute most of the dividends and use that for capital increase and consequently for expansion of the production lines, creating new job opportunities and also reducing the need to obtain loans from the banking system, it was resolved that for the Iranian year 1397 (2018-2019) the income tax related to the undistributed dividends of the companies registered at the Securities and Exchange Organization of Iran which are transferred to the capital account (subject of Article 105 of Direct Taxation Act) will be subject to a zero (0.0) rate (zero rate means exemption from payment of tax).