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1-The legislation for introduction of Value
Added Tax was finally ratified in May 2008
and the law shall be implemented from 22nd
September 2008 .
2-The Act follows the same principles as
accepted internationally and introduces the
tax which is a tax on exchanges and is
levied on added value that results from each
exchange.
3-The tax also applies to services imported
from abroad. However such taxes are expected
to be calculated and paid by the recipient
of services.
4-The Act provides for exemptions which
includes range of products and services such
as agricultural products, immovable,
medicines, banking and financial services
and others as more fully specified in
Article 12 of the Act.
5-The base is the value of goods or services
appearing on invoices/bills and the rate is
1.5% . The amount of tax must be clearly
identifiable on invoices.
6-In addition to the basic rate of 1.5% an
additional 1.5% is collected as Municipal
Levy ( ML ) on items subject to the basic
VAT rate of 1.5%. This levy for tobacco
products is 3% , for Aeroplane fuel 10% ,
Keroseone 10% and Gasoil 5% . Both charges
are dealt with , accounted for , treated ,
paid and collected in similar manner.
7-Taxpayers are duty bound to file a
quarterly return within 15 days of the end
of each quarter which is based on Iranian
year ending 20th March , irrespective of the
taxpayers financial year end. Those
companies which use Gregorian or other
financial year end must remember that the
VAT quarterly reports are fixed on 20th
June, 21st September , 20th December and
20th March .
8-This tax replaces all other similar taxes
prescribed under what is known as
Unification Law.
9- For further elaboration on implications
please contact us.
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