Tax Law
1. Introduction
With the expansion of industries and the increase of businesses in the new era, the range of taxes has also increased. This expansion has caused the knowledge of tax rights to be considered a citizenship right, and familiarity with it will ensure the interests of private individuals and companies.
In general, tax laws and regulations in each country determine the tax system of that country, and all businesses and economic operators must be fully aware of these laws. In addition, due to the necessity of aligning with new changes, usually, these laws or regulations are updated every year and partial changes are inevitable. This doubles the necessity of using the knowledge and expertise of lawyers and experts in order to know tax rights.
Tax collection and the realization of the anticipated revenues resulting from it are very important in developed countries, and the legislature uses all judicial and legal tactics to force the taxpayers to pay it. Also, strong guarantees and serious punishments are expected for the violators of paying taxes. In general, in every country, an important part of construction and development programs is realized by receiving direct and indirect taxes from citizens. Tax payment is so important in the political management system that according to many experts, one of the reasons for the government’s accountability to the citizens is their prominent role in providing the infrastructure costs of the country through tax payment.
ESK Internationla Law Firm
Our team is composed of highly skilled and versatile lawyers who combine practical experience and academic knowledge of their field. Most of our practitioners have worked in different professional environments, often outside their home jurisdiction.
2. Taxation in the Constitution of Iran
Article 51 of the Constitution of the Islamic Republic of Iran deals with the issue of taxes and states that the imposition, exemption, remission and reduction of taxes are possible only by law. In this way, it can be said that taxation is one of the special areas of the legislative branch, and the executive branch (government) cannot unilaterally decide on this matter through regulations, instructions and circulars. The proof of this is the repeated annulment of the directives of the Tax Organization by the Administrative Court of Justice due to going beyond the legal powers of the country’s Tax Organization.
3. Types of Taxes
In a general classification, taxes are divided into two types, direct and indirect. In direct taxes, a person pays a specified tax to the government treasury directly such as employee salary tax. In indirect taxes, however, a person pays the tax through an intermediary, and sometimes he may not even be aware of paying it; like fuel tax, which according to the value-added tax law, its rate is 20%, but people don’t feel the direct payment.
4. Tax Law and Relationship with Other Branches of Law
Tax law is closely related to other fields of law. According to Article 51 of the Constitution, tax law acts in the direction of preventing possible abuses by executive bodies and securing the interests of taxpayers.
Also, tax rights are related to criminal law by determining the punishment for the violation of tax rights and considering the legal punishments for the violators. On the other hand, tax law needs cooperation with civil law to define its set of rules in the field of inheritance, sale, rent, etc. Finally, it should be mentioned the direct relationship between tax law and administrative law, which monitors the performance of executive bodies, government officials, municipalities, and government-affiliated institutions on how these bodies pay taxes.
5. Execution of Tax Rights
Based on Article 219 of the Direct Taxes Law and with reference to Article 59 of the Third Economic Development Program of the country, identification and detection of taxable income, claim and collection of taxes subject to this law have been assigned to the Tax Organization. This Organization is in charge of law enforcement and along with tax officials and experts, it enforces tax laws and regulations.
6. Advising on Tax Law
Due to the existence of many laws, regulations and guidelines that sometimes work in a cross or parallel way, business owners and employees always need to know about these laws in order to prevent their rights from being violated. Also, legal and judicial challenges may arise on the tax issue in the path of achieving the goals of joint ventures, which will be very beneficial to use experienced lawyers in this field.
ESK Law Firm and Tax Law Services
Our expertise and experience of advising on the tax aspects of corporate transactions is unrivalled. We frequently work on structuring domestic and cross-border M&A, joint ventures and demergers, as well as corporate reorganizations.
We regularly advise on the tax issues that are key to structuring domestic and cross-border investments, including for funds and financial investor clients. Our team is known for structuring the most complex and challenging financial transactions, including regulatory capital and hybrid financing packages, structured bond transactions, rights issues, loan agreements and securitizations. Our contentious tax group provides experienced advice and guidance at all stages of a potential dispute with a tax authority, or a third party, on a tax-related matter. We support clients through a variety of business challenges, including advising on tax aspects of crisis management.
We provide advice for business, corporate and private clients on a variety of issues including income tax, Value Added tax (VAT), capital gains tax, payroll tax, stamp duty and tax litigation. Combining the skills of financial and tax specialists with those of economists, lawyers and other in-house specialists, our Tax team solves tax problems from the ideas stage through to execution.