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New Income Tax Rates Determined

New Income Tax Rates Determined New Income Tax Rates Determined

As approved by the Iranian Parliament on Sunday, those with an annual income of less than 276 million rials ($5,872) will be exempt from paying income tax in the next Iranian year (March 2018-19). 

The next year’s income tax model will be a progressive one, meaning people with higher incomes will pay higher tax rates, IRNA reported.

The income tax will consist of four tax brackets next year: 10%, 15%, 25% and 35%. 

Wages ranging from the base amount ($5,872) to three times more will be subject to a 10% tax rate on their additional income, three to four times more than the base amount will be taxed 15%, four to six times more 25% and the income of individuals who earn six times more than the base amount will be taxed at a 35% rate. 

This method of taxation known as marginal taxation aims to tax individuals based on their earnings, with low-income earners being taxed at a lower rate than higher income earners. 

The marginal tax bracket in which an individual falls does not determine how the entire income is taxed. Instead, income taxes are assessed on a progressive level.

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