Foreign Banks’ Tax Rebate Under Consideration

The government’s new tax bill–sent to the parliament in March–to enlarge the value added tax exemption list to include insurance firms and foreign banks’ services has now been taken up by the legislature’s specialized commissions.

 According to IRNA, if passed by Majlis, the bill will replace the current law that has been provisionally in place since 2009.

The bill exempts 13 new commodities and services from paying VAT with the most important ones concerning transportation and banking services.  

According to the bill, insurance services will be waived from VAT, leading to cheaper premiums to cover more people.

The bill also exempts the services of foreign bank representative offices in Iran from paying VAT.  Banks, licensed credit institutions do not need to pay VAT, according to the current law, but if the new bill passes, non-bank credit institutions, registered money exchangers, leasing companies with license from the Central Bank of Iran and also interest-free funds will be waived from VAT.

The government’s bill also waive the VAT for those who trade in bonds and securities on both the stock exchange and parallel markets but have obtained licenses from Iran Fara Bourse (over-the-counter market) or Securities and Exchange Organization of Iran.

The bill also exempts share buybacks and transfers, rights issues and the kind from VAT.