Taxation in Iran Law
Iranian companies and branches of foreign companies in Iran (Under Article 107 (c) of the Direct Tax Act, hereinafter “DTA”), “activities performed by [foreign] … legal persons and enterprises in Iran through the agencies, such as branches, representatives, agents and the like …” are subject to corporate income tax in Iran) are subject to the same tax regime when it comes to the taxation of profits. Both are compelled to keep books and accounting records.
The general rule in this regard is that the corporate income tax rate for all legal persons in Iran is 25%.
If a foreign company without commercial presence gains revenue from Iran and this revenue is the result of transferring rights and/or technology, the rate of withholding tax varies between 2.5 to 10%. Double Tax Treaties may define different rules and provide for specific withholding tax rates or allocate the right to taxation exclusively to Iran or the other contracting state.
Iranian VAT at the rate of 9% will also apply to the foreigners for the supply of goods and services in Iran.