Implementation of the new Iranian VAT law as of January 2022

J.Nouraei & M.Mostafavi Law Offices – The Iranian Parliament approved the new VAT law on 02/03/1400 (23 May 2021) which comes into effect after 6 months from the date of notification to the Iranian President on 12/04/1400 (3 July 2021). Until its implementation on 2 January 2022, the current VAT law, approved on 17/12/1387 (7 March 2009), with its subsequent amendments and additions remain in effect.

According to Article 7 of the new law, the VAT rate of goods and services, with the exception of certain categories whose rate is specified in Article 26 of the same law, will be nine percent (9%). That amount includes a six percent (6%) tax for the government and a three percent (3%) levy for the municipalities.

According to article 2 of the same law, the supply of goods and services in Iran and their import and export, with respect to tax and levies, are subjected to the provisions of this law. Certain services andgoods (such as agricultural products) and export of goods under certain conditions are subject to a VAT exception. Services, provided by persons residing in Iran (Iranian natural or legal persons or branches of foreign companies active in Iran), whatever the place of purchase or destination of those services, whether inside or outside the country, in case foreign currency is gained and brought directly or indirectly to the country, will be considered as a VAT-exempt export.

VAT paid for the purchase of goods by both Iranian and foreign passengers in Iran, provided they leave the country within two months after the date of purchase, and also VAT paid by foreign tourists for buying tickets from Iranian airlines, shall be refunded to the purchaser at the time of leaving the country, if the electronic invoice and supporting documents are presented accordingly.

Other issues are also addressed in the new VAT law, outlined in 57 articles.

Find the full Farsi text of the new VAT law by clicking here.

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