What is the corporate tax rate if any in Iran on the profits of the company?
The Direct Taxes Act of Iran imposes a tax on the income of “legal entities“, a term that encompasses companies, partnerships, cooperatives and other bodies of similar nature.
Foreign legal entities residing abroad shall be taxed at the flat rate of 25% in respect of the aggregate taxable income derived from the operation of their investment in Iran or from the activities performed by them, directly or through the agencies in Iran.
The legal entities shall not be subject to any other taxes on the dividends or partnership profits they may receive from the capital recipient companies.
Legal entities are obligated to, even within the exemption period, submit declaration and profit and loss balance sheets, provided from their official statutory books, maximum four months after the tax year (March 21 each year until March 20 next year) along with the list of partners and shareholders, their shares and addresses to the tax department within the area of the activity of the legal entity.
If these legal entities do not submit the documents within the stipulated time span, the tax exemption will be null and void.