Labour and tax laws in Iran
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Labour and tax laws in Iran govern the employment and fiscal contributions of people working and living in Iran. Roughly one-fourth of Iran's labour force is engaged in manufacturing and construction. Another one-fifth is engaged in agriculture, and the remainder are divided almost evenly between occupations in services, transportation and communication, and finance. Women are allowed to work outside the home but face restrictions in a number of occupations, and the number of women in the workforce is relatively small in light of their level of education. Some of the numerous refugees in the country are allowed to work but, with the exception of a highly skilled minority, are generally restricted to low-wage, manual labour positions in construction and agriculture. Generally speaking, Iranians have the reputation to be industrialist and entrepreneurial.
In 2004, about 45 percent of the government's budget came from exports of oil and natural gas revenues, although this varies with the fluctuations in world petroleum markets and 31 percent came from taxes and fees. Government spending as percent of total budget was 6% for health care, 16% for education and 8% for the military in the period 1992-2000 and contributed to an average annual inflation rate of 14 percent in the period 2000-2008.
In 2006, Iran’s labor force was estimated at 26.2 million, of which women accounted for 33 percent. A continuing strong labour force growth unmatched by commensurate real economic growth is driving up unemployment to a level considerably higher than the official estimate of 14%. According to experts, annual economic growth above five per cent would be needed to keep pace with the 750,000 new labor force entrants each year. More than two-thirds of the population of 70 million is under 30. In 2009, the average annual salary in Iran was US$4,800. In 2008, 15.6 percent of those without work were university graduates. Afghans working in Iran send home close to $500 million per year (2008).
There is a minimum national wage applicable to each sector of activity fixed by the Supreme Labor Council which is revised annually. In 2010 the minimum wage, determined by the Supreme Labor Council, was about US$303 per month (US$3,636 per year). Membership in the social security system for all employees is compulsory. The national poverty line for Tehran in the year ending March 20, 2008 was $9,612 per year and the national average was $4,932.
Although Iranian workers have, in theory, a right to form labour unions, there is, in actuality, no union system in the country. Workers are represented ostensibly by the Workers' House, a state-sponsored institution that nevertheless attempts to challenge some state policies. Guild unions operate locally in most areas but are limited largely to issuing credentials and licenses. The right of workers to strike is generally not respected by the state, and since 1979 strikes have often been met by police action.
The comprehensive Labor Law covers all labor relations in Iran, including hiring of local and foreign staff. The Labor Law provides a very broad and inclusive definition of the individuals it covers, and written, oral, temporary and indefinite employment contracts are all recognized.
The Iranian Labor Law is very employee-friendly and makes it extremely difficult to layoff staff. Employing personnel on consecutive six-month contracts is illegal, as is dismissing staff without proof of a serious offence. Labor disputes are settled by a special labor council, which usually rules in favor of the employee.
The Labor Law provides the minimum standards an employer must adhere to when forming an employment relationship. The minimum age for workers in Iran is 15 years, but large sectors of the economy (including small businesses, agricultural concerns, and family-owned enterprises) are exempted.
Provisions of Employment Contract
To have a valid contract concluded under the Law, the following provisions must be included:
- 1. Type of Work, vocation or duty that must be undertaken by the worker;
- 2. Basic compensation and supplements thereto;
- 3. Working hours, holidays and leaves;
- 4. Place of performance of duties;
- 5. Probationary period, if any;
- 6. Date of conclusion of contract;
- 7. Duration of employment; and
- 8. Any other terms and conditions required according to nature of employment.
The employer may require the employee to be subject to a probationary period. However, the probation time may not exceed one month for unskilled workers and three months for skilled and professional workers. During the probation period, either party may immediately terminate the employment relationship without cause or payment of severance pay. The only caveat being that if the employer terminates the relationship, he must pay the employee for the entire duration of the probation period.
Suspension of Employment Contract
The fact that the employment contract can be suspended by an employee under certain conditions presents yet another challenge to employers. What this allows is suspension of the employment contract under the following conditions:
- 1. The period of military service (active, contingency and reserve), as well as voluntary enlistment during conflicts. This period shall be considered part of the employee's service record at place of employment;
- 2. The closure of a workshop or parts thereof due to force majeure;
- 3. Educational leave for up to four years; and
- 4. The period of detention that does not lead to conviction;
Once the conditions giving rise to the suspension of the contract are removed, the employer must allow for return of the employee to work. If the position is filled or eliminated, the employer is obligated to provide a similar position for the employee. Failure to do the above is considered wrongful discharge and subject to legal action.
Termination of Employment Contract
The Law allows for termination of the employment contract only under the following instances:
- 1. Death of employee;
- 2. Retirement of employee;
- 3. Total disability of employee;
- 4. Expiration of the duration of the employment contract;
- 5. Conclusion of work in task specific contracts; and
- 6. Resignation of the employee.
The employer is bound to pay benefits under all of the above scenarios according to the years of service.
Dismissal of an Employee
An employee may only be dismissed upon approval of the Islamic Labor Council or the Labor Discretionary Board. Grounds for dismissal include an employee's neglect in carrying out his/her duties or violation of disciplinary by-laws of the employer. The employer must have provided written prior notice of the employee's violations. If the board is not convinced that the employee's dismissal is justified, the employer must reinstate the employee. Once an employee is dismissed, the employer is obligated to provide the legal severance package.
Severance & Termination Benefits
The Law mandates the following compensation for terminated, disabled and suspended employee:
- 1. Suspended Employee - Where an employee is suspended without cause the employer must reinstate the employee and pay for all damages and compensation resulted from the wrongful suspension;
- 2. Terminated Employee - An employer is under legal obligation to provide thirty (30) days salary for every year of service for employees made redundant or retired;
- 3. Disabled Employee - The employer must pay 30 days salary for every year of service. Moreover, if disability of an employee is due to working conditions, the employer must pay 60 days salary for every year of employee's service period.
Working Hours & Overtime
The workweek in Iran is based on a 44-hour week. Typically, employees work Saturday through Wednesday (8 hours per day) and a half a day on Thursday (4 hours). Any hours worked beyond these will entitle the employee to overtime. The Law mandates a payment of 40% above the hourly wage to employees for any accrued overtime. The employee must consent to overtime work.
Holidays & Leave
Employees are entitled to leave on all official state holidays (approximately 22 days a year) and Fridays. Any employee working during these holidays will be entitled to overtime pay. Additionally, employees are entitled to one-month holiday per annum. The annual leave for those employees engaged in hard and hazardous employment shall be five weeks per annum. Employees are entitled to save up to 9 days of their annual leave.
In case of termination, disability or redundancies, employees must be compensated for any accrued leave. Finally, employees are entitled to 3 days of paid vacation for marriage or death of a spouse, father, mother or child.
Women employees are entitled to 90 days of maternity leave. The employee's salary during maternity leave will be paid according to the provisions of the Social Security Act. Maternity leave must be considered part of an employee's service record. Employers must provide returning employees with the same position.
Employment of Foreign Nationals
The Law forbids employment of foreign nationals without a proper work permit. Diplomats, United Nations employees and foreign press reporters are exempt from this requirement. A work permit to a foreign national will be issued only if the following conditions are met:
- 1. Lack of expertise among Iranian nationals;
- 2. The foreign national being qualified for the position; and
- 3. The expertise of the foreign national will be used for training of, and later replacement by, Iranian individuals.
Work permits will be issued, renewed or extended for a maximum period of one year. Moreover, no exit visa will be granted to the foreign national unless the national has paid all due taxes, duties, etc.
A very recent law provides that workshops with less than five employees will not be subject to the labor laws.
The Iranian constitution entitles Iranians to basic health care, and most receive subsidized prescription drugs and vaccination programs. An extensive network of public clinics offers basic care at low cost, and general and specialty hospitals operated by the Ministry of Health provide higher levels of care. In most large cities, well-to-do persons use private clinics and hospitals that charge high fees. Specialized medical facilities are concentrated in urban areas, but rural communities have relatively good access to primary care physicians at clinics in villages, where the government-sponsored primary health care system has raised the level of health education and prenatal care since the late 1990s.
Iran has a comprehensive social protection system with some 28 social insurance, social assistance, and disaster relief programs benefiting large segments of the population. These programs include training and job-search assistance, health and unemployment insurance, disability, old-age and survivorship pensions, and in kind- or in-kind transfers including subsidies (e.g., housing, food, energy), rehabilitation and other social services (e.g. long-term care services for the elderly), and even marriage and burial assistance.
Despite significant achievements in human development and poverty reduction, serious challenges to growth call for reform. While labor-market pressures continue to increase because of demographic dynamics and increased participation of women in the labor force, Iran’s economy is still unable to generate enough needed jobs to absorb the new flows into the labor market and at the same time reduce unemployment extensively.
In addition to income tax, employers are required to contribute to the State Social Security Fund and the Employment Fund. For social security and unemployment insurance, the employee pays 7% of salary (between the ages of 18-65), employer (20 to 23%), the State (3%). Independent workers pay 12-18%, depending on the type of coverage sought. In 2003 the minimum standard pension was 50 percent of the worker’s earnings but not less than the amount of the minimum wage.
The social security makes it possible to ensure the employees against unemployment, the disease, old age (retirement pension), the occupational accidents. Iran did not legislate in favour of a universal social protection, but in 1996, the Center of the statistics of Iran estimates that more than 73% of the Iranian population is covered by a Social Security. The Organization of the social security, managed by the Ministry of social protection, delivers also family benefits and of maternity under certain conditions. Iran spent 22.5 percent of its 2003 national budget on social welfare programs. More than 50 percent of that amount covered pensions.
Welfare programs for the needy are managed by more than 30 individual public agencies and semi-state organizations called Bonyad, as well as by several private non-governmental organizations. In 2003 the government began to consolidate its welfare organizations in an effort to eliminate redundancy and inefficiency.
The fiscal year begins on March 21 and ends on March 20 of the next year. All foreign investors doing business in Iran or deriving income from sources in Iran are subject to taxation. Depending on the type of activity the foreign investor is engaged in, various taxes and exemptions are applicable, including profit tax, income tax, property tax, etc. The Ministry of Finance and Economic Affairs is the government agency authorized to levy and collect taxes. There are virtually millions of people who do not pay taxes in Iran and hence operate outside the formal economy. Overall, an estimated 50 percent of Iran’s GDP was exempt from taxes in FY 2004.
According to the Economist Intelligence Unit, Iranian taxation laws are highly complex and inconsistently applied. Iranian taxation generates particular unease among foreign firms because they appear to be arbitrarily enforced – tax bills are initially based on 'assumed earnings' calculated by the Finance and Economy Ministry according to the size of the company and the sector in which it operates. Factors such as the quality and location of a company's offices are also widely believed to have an impact on tax assessment. As part of the Iranian Economic Reform Plan, the government has in 2010 proposed income-tax increases on traders in gold, steel, fabrics and other sectors, prompting several work stoppages by merchants.
Indirect Taxes (sales, VAT)
In 2008, sales tax rate in Iran was 3%. Value Added Tax Act (VATA) was put into effect since mid-year 1387 (2008). Its implementation was suspended following 10 days of widespread demonstrations across Iran in October 2008. This Act has substituted all previous laws and regulations dealing with indirect taxes (including sales tax). According to the VATA, supply of commodities and services, as well as their imports and exports, shall be subject to the provisions of this Law.
According to article 16 of this Act, the VAT rate is 1.5 percent, but the VAT rates of certain goods such as "cigarettes and tobacco products" and "gasoline and jet fuel" are respectively 12 and 20 percent. In addition to the VAT rates just mentioned, article 38 of VATA levies the following duties on goods and services which are subject to this Act:
|all types of cigarettes and tobacco products||3%|
|all types of petrol (gasoline) and jet fuel||10%|
|kerosene and gas oil||10%|
|on fuel oil||5%|
|all other goods and services||1.5%|
VAT tax exemption
VAT will not apply to free trade zones in Iran. However, goods and services entering Iran's customs territory will be subject to payment of VAT according to the law. Articles 12 and 13 stipulate that supply and importation of some commodities and services including the following shall be exempt from the VATA:
- a) Unprocessed agricultural products;
- b) Livestock and live poultry, aquatic products, honey bees and silkworms;
- c) All types of fertilizers, pesticides, seeds and saplings;
- d) Bakery flour, bread, meat, sugar, rice, cereals and soya, milk, cheese, shortening and baby formula;
- e) Books, press, notebooks and all types of printing papers, writing pads and papers and press papers;
- f) Passenger goods for personal use, as exempted under the Export-Import Regulations ;
- g) Immovable property;
- h) All types of medicine, medical consumables, medical services (human, animal or plant) as well as rehabilitation and other supportive services;
- i) Services subject to payment of salary taxes envisaged in the Direct Taxation Law;
- j) Banking and credit services rendered by banks, credit institutes and cooperatives, authorized interest-free loan funds and cooperative funds;
- k) Public transportation services and urban and inter-city roads, railway, air and sea passenger transport services;
- l) Hand woven carpets;
- m) All types of research and training services, as stipulated in a By-Law to be approved by the Council of Ministers;
- n) Animal and poultry feed;
- o) Export of goods and services from official exit points. Any tax paid on account of such exports shall be reimbursed (as regards commodities) upon submitting a certification of the customs certifying the export of goods. Value Added Tax (VAT) does not apply to free trade zones (FTZ) in Iran. However, goods and services entering Iran's customs territory from FTZs will be subject to payment of VAT according to the law.
There are five categories of income earned by individuals. Each category is taxed separately and has its own computational rules.
- Salaries (see below);
- Income from professions, trades, and miscellaneous sources; (see here)
- Incidental or windfall earnings; (see here)
- Real estate income (see under "Real estate tax" section below)
- Income derived from agriculture (see under "Tax exemptions" section below)
For taxable income consisting of salary and benefits, employers are required to make the necessary tax deductions from their employees’ payroll and submit them to the tax authorities. However, when calculating taxable income, exemptions and deductions are allowed. As of 2009, only government employees were paying their fair share of income taxes.
Individuals of Iranian nationality resident in Iran are subject to tax on all their income whether earned in Iran or abroad. Foreign nationals working in Iran are also subject to the same income tax based on their salary. Non-resident individuals are liable to pay tax only on their Iranian-sourced income. Foreign employees cannot obtain an exit visa from Iran unless they provide proof that they have paid their due taxes, and since they need to obtain an exit permit when their presence in Iran is based on a work permit, the government can easily enforce this rule. The government assumes a certain salary for employees depending on their position and country of origin. The assumed minimum monthly salaries in 2004 range from US$2,500 for unskilled European workers to US$7,000 for European managing directors.
|Annual Income/Profit in IRR||Income Tax Rate|
|Up to 30,000,000 (US$3,230)||15%|
|30,000,000 to 100,000,000 (US$10,767)||20%|
|100,000,000 to 250,000,000 (US$26,917)||25%|
|250,000,000 to 100,000,000 (US$107,666)||30%|
|In excess of 1,000,000,000 (US$107,666)||35%|
Real estate tax
Rental income is subject to real estate income tax in Iran. A fixed deduction of 25% of the gross income is extended to all taxpayers to account for income-generating expenses. The net income, which is 75% of the gross rent, is then subject to the same rates as in the above table (max. 35%). Rental income is exempted from real estate tax if the property is a residential property leased as such and measures up to 150 sq. m. if it is located in Tehran (up to 200 sq. m. if it is located in other parts of the country).
In Iran the transfer of land, not the land itself, is subject to taxation. Transfer of properties: 5% of the transaction value (15% for new buildings).
Capital gain tax
As of July 2010, taxes on TSE transactions are as follows:
- Cash dividend: none (22.5% at source from Company).
- Share transfers: the Tax Amendment has changed the regulations regarding calculation of tax on transfer of shares and their rights in Iranian corporate entities.
- In the case of shares listed on the Tehran Stock Exchange (TSE) the tax on transfer of such shares and other rights is 0.5 per cent of the sales price.
- In the case of transfer of the shares and their rights to other corporate entities (i.e. those not listed on the TSE) a flat rate of four per cent of value of the shares and rights transferred applies. No other taxes will be charged. The Amendment has removed the requirement to value the shares in this category.
- Capital gain: no tax (bonds or equities).
- Interest income: no tax.
- Participation papers: Profit and awards accrued are tax exempt.
- Listed companies: 10% tax exemption, companies holding 20% free loat shares are provided 20% tax exemption.
- Foreign investors: Foreign investors in TSE are tax-exempt.
Inheritance taxes are levied at progressive rates depending on the relationship between the deceased and the heir.
- Category I: (first degree heirs) parents, spouse, children, grandchildren
- Category II: (second degree heirs) grandparents, siblings, nieces, nephews
- Category III: (third degree heirs) uncles, aunts, children of uncles and aunts
A deduction allowance of IRR30 million (US$3,230) is extended to each first degree heir. First degree heirs who are below 20 years of age or are incapacitated are entitled to the maximum deduction allowance of IRR50 million (US$5,383).
The inheritance tax rates are as follows:
|Tax base, IRR (US$)||I||II||III|
|Up to 50 million (US$5,383)||5%||15%||35%|
|50 million – 200 million (US$21,533)||15%||25%||45%|
|200 million – 500 million (US$53,832)||25%||35%||55%|
|Over 500 million (US$53,832)||35%||45%||65%|
Corporate Profit Tax
A new flat rate corporation tax of 25 per cent payable on the profits of corporate commercial entities has been introduced. This rate replaces the old corporation tax of 10 per cent and progressive rates of income tax (12-54 per cent) on reserves and distributable income. Apart from the 25 per cent corporation tax and the 0.3 per cent Chamber of Commerce tax no more taxes will be payable by the corporate entity or the shareholders. 
The new rate of corporation tax will also apply to joint venture corporate entities registered in Iran. The tax incidence will therefore be on the corporate entity and not on the shareholder. The calculation of the tax has been simplified.
All contracting work performed by foreign contractors, whether or not the company is registered in Iran, is taxed. For contracts signed before March 21, 2003, gross taxable income is calculated as gross contract receipts less the cost of imported material. Income is then taxed at 12% of gross taxable income less contract retention. For contracts signed after March 21, 2003, taxable income is the gross contract receipts less contract expenses. Income is taxed at 25 per cent less 5 per cent taxes withheld at source.
Taxation of foreign companies
Generally speaking, Iran has two types of laws concerning foreign companies. The first are laws that address issues concerning foreign companies directly such as the Foreign Investment Promotion and Protection Act (FIPPA) and the second are general laws of which certain articles or by-laws address foreign companies, for instance the Taxation Law and the Labor Law. The Tax Act had divided the source of income earned by foreign companies either direct or through their branches in Iran into three main categories :
- Income earned in Iran by way of contracting operations
- Income earned from Iran by way of royalties and licensing fees
- Other activities - trading operations, etc.
[Note: The Amendment has introduced certain changes in the tax treatment of the above activities.]
Foreign legal entities must pay taxes on all taxable income earned through investments in mainland Iran or from direct or indirect (through agents, branch offices, etc) activities in mainland Iran, at the flat rate of 25% as mentioned in Article 47 of the Amendment law.
Income from royalty and licensing fees received from industrial and mining companies, government ministries and municipalities, and income from film-screening rights are subject to a deemed taxable coefficient on income of 20 per cent. All other income from royalties and licences from foreign companies is subject to a deemed taxable coefficient on income of 30 per cent. The coefficients are based on the standard corporate tax rate of 25 per cent, so that the effective tax rate is either 5 per cent or 7.5 per cent.
[Note: The Amendment has removed the confusion surrounding 'technical assistance contracting' by including 'technical assistance' and 'transfer of technology' in contracting operations subject to tax on the basis of 12 per cent of annual fees.]
Tax on Liaison, Representative and Branch Offices
The same corporate and profit taxes will be applied to the taxable income of branches of foreign companies (contractors, consultant engineers, et al.)
Other income earning activities of foreign branches will be subject to taxation on an actual basis, ie. based on their income tax return as filed and supported by their statutory accounting books. 
Expenses incurred in Iran by Iranian registered branches and representative offices of foreign companies that are not authorised by their head offices to engage in any trading activity but are only authorised to conduct marketing and market research in Iran are tax deductible upon presentation of receipts from their head office.
Tax Advantages & Exemptions
- Income tax exemptions are available to new factories established in "special areas", and last from four to eight years, from the first day of operations. In addition, 80% of the reported profit of all manufacturing, mining, assembly plant and related engineering companies are exempt from income taxes. Tax incentives, meanwhile, are available to manufacturing, mining, agricultural activities, exports and investment in special areas.
- In the agricultural sector, by virtue of Article 81 of the Direct Taxation Act, the revenues of activities in the fields of agriculture, animal husbandry and livestock, pisciculture, apiculture, raising poultry, hunting, fisheries, sericulture, and restoration of forests, pasturage, orchards, trees and palms of whatever kind are exempted from taxation.
- The income of rural, tribal, and agricultural cooperative societies and those of fishermen, laborers, employees, students and their unions are 100 percent tax exempt.
- The revenues from hand woven carpets and handicrafts and the related production cooperative companies and unions are exempt from taxation.
- The revenues of inventors or discoverers from their innovations and discoveries are exempt from taxation. Also revenues of research and development activities of institutes which have obtained licenses for such activities from the relevant ministries will be exempt from taxation for 10 years as of the entry into force of the Amendment, according to the provisions of the relevant circular of the Council of Ministers.
- Profit and awards accrued to participation papers are tax exempt.
- All housing production projects for the low-income groups and housing production in the dilapidated urban fabrics will enjoy a discount of around 50% on construction tariffs and construction density fees. The remaining amount can be paid in installments and will not be subject to any commission fees.
Foreign Investment Promotion and Protection Act (FIPPA)
|Activity||Level of Exemption||Duration of Exemption|
|Agriculture||100%||No Time Limit|
|Industry and Mining||80%||4 Years|
|Industry and Mining in Less-Developed Areas||100%||10 Years|
|Tourism||50%||No Time Limit|
|Exports||100%||No Time Limit|
Location requirement for tax-exemption:
- If investment located out of a 120-kilometer radius from the center of Tehran,
- If investment located out of a 50-kilometer radius from the center of Isfahan,
- If investment located out of a 30-kilometers radius from the centers of provinces (except for the Industrial Estates within this radius)
100% of taxable income of all units located in less developed areas shall be tax exempted for a period of 10 years.
Tax Exemption - Major changes
The exemptions on exports of manufactured and agricultural goods remain in force, but an ambiguity has occurred in the Amendment regarding exemptions extended to the public sector (Iranian Government owned entities). Government owned enterprises and their shares in the private sector entities were excluded from all exemptions granted under the Tax Act.
This exclusion has been removed from the relevant texts in the Amendment. Until clarification is provided, it is not certain whether or not the government minority shares in the private sector manufacturing, mining and exports activities would enjoy the exemptions granted.
Losses sustained by all taxpayers engaged in trading and other activities, who are required to keep proper books of account, provided they are accepted by the tax authorities; will be carried forward and written off against future profits without any limitation.
Municipal tax in Iran is 3%. (plan to replace it with VAT tax)
In addition to these mandatory taxes, Islamic taxes are collected on a voluntary basis. These include an individual's income tax (Arabic khums, “one-fifth”); an alms-tax (zakat), which has a variable rate and benefits charitable causes; and a land tax (kharaj), the rate of which is based on the principle of one-tenth ('ushr) of the value of crops, unless the land is tax-exempt.
It is noteworthy to point out that the Amendment has removed the second stage of appeal process. Appeals to the High Council of Taxation could only be made on questions of non-compliance with the provisions of the Tax Act rather than questions of fact.
The Amendment has for the first time after 1979 reintroduced the concept of the tax audit to be undertaken by 'official accountants' and their designated firms. The taxpayer or the tax administration can choose to appoint an official accountant or a designated firm of official accountants to examine his records and report to the tax authorities.
The accounting profession is not particularly organized in Iran. However, the influence of the foreign accounting practices implies an evolution and a relation between the Iranian accountants training and the American one. Thus, an increasing number of accountants and Iranian auditors receives an American training and apply it in Iran. This will contribute to strengthen the harmonization of Iranian book-keeping systems with international standards. KPMG and PriceWaterhouseCoopers are both present in Iran. The main professionals and representative organization in Iran is The Iranian Institute of Certified Accountants.
As of 2006, imports to Iran valued at more than IR500,000 ($50,000) must undergo pre-shipment quantity and quality inspection in their country of origin by an internationally recognised inspection organisation (such as SGS S.A.). Goods exported to Iran must be subject to invoices authenticated by the Iranian Embassy and by a nominated Chamber of Commerce operating in the supplier's country.
|mining raw production||15%|
|paper and wood fabrics||15%|
|agricultural raw production||25%|
One third of the imported goods in Iran are delivered through the black market, underground economy, and illegal jetties. Iran is modernizing the customs to prevent the smuggling of contraband in and out of the country worth $12 billion annually. Other estimates put the value of smuggled goods into Iran alone at $5.5 billion-$6 billion annually. In 2010, Police in Iran estimated about $16 billion worth of goods is smuggled into Iran each year. $12 billion worth of goods are illegal to have or own in Iran, with the remaining $4 billion being legal goods that are legal to own in Iran.
- Drug smuggling ($8.5 billion),
- Petroleum smuggling (>$1.3 billion),
- Alcohol smuggling ($912.5 million),
- Cigarette smuggling,
- Arms trafficking,
- Pirated movies and software piracy.
One Majlis member recently stated that IRGC black-market activities alone might account for $12 billion per year. Besides the IRGC, rogue elements within the Government of Iran, Bonyads and the Bazaar are allegedly involved in the smuggling activity.
Up to 80 percent of these goods enter the country through unregistered ports and jetties in the Persian gulf, thus undermining the domestic industries in agriculture, garment, textile, home appliances, electronics, etc.
Dubai and Khasab in the Persian Gulf are important foreign centers of smuggling into Iran. These imports enter Iran through major ports such as Bandar-e Abbas or free trade zones such as the islands of Kish and Qeshm. Excessive import tariffs (for items such as clothing for example) also contributes to smuggling in Iran.
Economic dumping by countries like China stem from a combination of factors such as overpriced/low-quality of comparable Iranian goods (i.e. lack of competitiveness) in most cases and low Iranian tariff rates for those goods. Iran has since passed a law that bans the import of foreign goods and services when similar products or capacities already exist in Iran. Adaptation by domestic suppliers to Iranian consumer tastes and the marketing of Iranian goods needs also to be developed and improved.
In an effort to streamline and harmonize the customs procedure with other governmental and private partners, the Government of Iran has selected ASYCUDAWORLD as a tool for its customs administration in order to move toward e-commerce and e-customs. This project is a technical cooperation project between the Islamic Republic of Iran Customs Administration (IRICA), UNCTAD and UNDP. As of March 21, 2010, all imported goods must have barcode stickers Iran Code that meet the national and international standards.
Free trade zones and re-export
Value added tax (VAT) will not apply to free trade zones in Iran. However, goods and services entering Iran's customs territory will be subject to payment of VAT according to the law. In accordance with Article 12 of the Export-Import Regulations Act, the pre-exportation entry (temporary importation) of materials and goods to be used in producing, finishing, processing and packaging of exported goods are exempted from all import duties.
- List of major economic laws in Iran
- International Rankings of Iran in Economy
- Iranian Labour News Agency
- Constitution of Iran
- Education in Iran
- Syndicate of Workers of Tehran and Suburbs Bus Company
- List of trade unions in Iran
- Iranian calendar
- Economy of Iran
- Bonyad - Iran's foundations which control 20% of Iran's GDP.
- Government of Iran
- Iran's brain drain
- Tax rates around the world
- Iran travel guide from Wikitravel
References and notes
- ^ Iran: Crude price pegged at dlrs 39.6 a barrel under next year's budget Retrieved 30 January 2008
- ^ "Iran - MSN Encarta". Archived from the original on 2009-10-31. http://www.webcitation.org/query?id=1257023610265363.
- ^ http://www.nitc.co.ir/iran-daily/1387/3157/html/index.htm
- ^ PressTV: Iranian unemployment rate not reduced to target Retrieved January 26, 2010
- ^ http://www.iran-daily.com/1387/3279/html/economy.htm#s347187
- ^ http://www.iran-daily.com/1387/3292/html/economy.htm
- ^ http://www.hesabdary.com/news/detail.asp?id=1402
- ^ http://www.farsnews.com/newstext.php?nn=8812221177
- ^ http://www.imf.org/external/np/fin/data/rms_mth.aspx?SelectDate=2010-01-31&reportType=REP
- ^ PressTV: 29-33% of Iranians live below poverty line Retrieved June 7, 2009
- ^ a b c d e f g h i j k l m n http://www.ilo.org/dyn/natlex/docs/WEBTEXT/21843/64830/E90IRN01.htm
- ^ U.S. Social Security Administration: Iran's entry Retrieved October 14, 2010
- ^ U.S. Social Security Administration: Iran's entry Retrieved October 14, 2010
- ^ 
- ^ Ahmadinejad's Achilles Heel: The Iranian Economy
- ^ http://lcweb2.loc.gov/frd/cs/pdf/CS_Iran.pdf
- ^ http://online.wsj.com/article_email/SB10001424052748703735804575535920875779114-lMyQjAxMTAwMDEwMTExNDEyWj.html
- ^ http://www.doingbusiness.org/ExploreTopics/PayingTaxes/Details.aspx?economyid=91
- ^ Press TV - VAT to replace Iran sales tax in fall
- ^ http://www.payvand.com/news/08/dec/1173.html
- ^ a b c d e http://www.irantradelaw.com/wp-content/uploads/2010/03/Irans-Foreign-Trade-Regime-Report.pdf
- ^ http://www.turquoisepartners.com/iraninvestment/IIM-Dec10.pdf
- ^ a b c http://www.presstv.com/detail.aspx?id=107765§ionid=351020102
- ^ http://www.atimes.com/atimes/Middle_East/JH26Ak02.html
- ^ a b http://www.globalpropertyguide.com/Middle-East/Iran/Taxes-and-Costs
- ^ a b c http://www.developing8.org/downloads/General%20Files/Private%20Sector%20Informations/Iran/Foreign%20Investment%20in%20Housing%20Sector%20%28Iran%29.pdf
- ^ http://www.atimes.com/atimes/Middle_East/JH26Ak01.html
- ^ http://www.turquoisepartners.com/iraninvestment/IIM-AprMay09.pdf
- ^ a b Tehran Stock Exchange: FACT BOOK. Retrieved July 31, 2010
- ^ a b "Iran Profile - Doing business - For Australian Exporters - Export assistance, grants, and help. - Australian Trade Commission". Web.archive.org. Archived from the original on 2006-10-04. http://web.archive.org/web/20061004192232/http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID0019-2_-3_PWB1151550-4_doingbusiness-5_-6_-7_,00.html. Retrieved 2010-07-29.
- ^ a b http://www.feas.org/Member.cfm?MemberID=21
- ^ http://www.irantradelaw.com/wp-content/uploads/2010/03/Irans-Foreign-Trade-Regime-Report.pdf
- ^ "Iran offers incentives to draw investors". Presstv.com. 2010-04-26. http://www.presstv.com/detail.aspx?id=124450. Retrieved 2010-07-29.
- ^ http://www.globalpropertyguide.com/Middle-East/Iran/Inheritance
- ^ http://www.taxarticles.info/2009/06/iran-tax-system-at-a-glance/
- ^ 
- ^ 
- ^ a b c http://www.iio.ir/WebGenerator/PageView.aspx?src=7
- ^ http://fita.org/countries/fiscalite_59.html
- ^ http://en.tpo.ir/UserFiles/File/Mehr%20&%20Azar.pdf
- ^ a b http://web.archive.org/web/20061004192232/http://www.austrade.gov.au/australia/layout/0,,0_S2-1_CLNTXID0019-2_-3_PWB1151550-4_doingbusiness-5_-6_-7_,00.html
- ^ a b http://rand.org/pubs/monographs/2008/RAND_MG821.pdf
- ^ http://www.iran-daily.com/1387/3274/html/economy.htm
- ^ http://www.havocscope.com/regions-main/middle-east/iran/
- ^ http://www.havocscope.com/regions-main/middle-east/iran/
- ^ http://www.havocscope.com/ranking/products/alphabetical/
- ^ a b c d http://iranprimer.usip.org/resource/bazaar
- ^ http://www.iran-daily.com/1388/12/11/MainPaper/3630/Page/4/?NewsID=11600
- ^ http://www.nitc.co.ir/iran-daily/1388/3438/html/economy.htm#s389754
- ^ http://news.yahoo.com/s/ap/20100809/ap_on_re_mi_ea/ml_iran_sanctions_2
- ^ http://www.iran-daily.com/1387/3326/html/economy.htm
- ^ http://www.nourlaw.com/newsletter/newsletter.html#Iranian_Government_Bans_Purchase_of_Certain_Foreign_Goods
- ^ http://www.presstv.com/detail.aspx?id=121954§ionid=351020101
- ^ http://www.payvand.com/news/10/aug/1249.html
- ^ http://sdnhq.undp.org/e-gov/retreat/arns/Iran_e-customs.pdf
- ^ http://www.iran-daily.com/1388/12/11/MainPaper/3630/Page/4/Index.htm
- Paying Taxes in Iran - World Bank
- (English) Ministry of Finance in Iran - Direct tax laws
- Annual Reviews - Reports by the Central Bank of Iran, including macro-economic data, sectoral activity and labor statistics.
- US Social Security Administration - Iran's entry (details on Iran's social security laws)
- Corporate Income Tax in Iran - Iran Trade Point
- Education and training to Iran - Australian Trade
- Summary of Principal Iranian Taxes (Note: document has not been updated)
- Tehran Chamber of Commerce - Offers free tax consulting for companies intending to invest in Iran
- Islamic Republic of Iran's Customs Administration
- Iran's Export-Import Regulation Act (2002)
- (English) Nur Law - Database on Iranian laws and regulations
- Iran's list of countries which have signed double taxation convention, or bilateral reciprocal promotion & protection of investment agreements
- Australian trade: Doing business in Iran - Many practical information including importation procedure to Iran.