Iran Tax Administration: Forex Trade Subject to Income Tax

Information on all foreign exchange traders’ transactions must be shared with the Iranian National Tax Administration, which are subject to income tax, the organization announced on Wednesday. 

“Institutional and non-institutional traders, bureaux de change, banks and financial and credit institutions and the Central Bank of Iran are mandated to share their transaction details as well as information on the identities, assets and properties of traders with INTA as per Clause 5 of National Services Law,” reads INTA’s announcement.

The organization called on traders to keep their foreign exchange transaction documents for future reference.

INTA’s announcement comes amid continuing devaluation of the rial, primarily against the euro and US dollar, and heated market demand for hard currency.

The rial dropped to 46,500 against the dollar in the open market late January from 37,700 in mid-2017. Stopping short of touching the psychological threshold of 48,000 on Monday, it finally bowed to the Central Bank of Iran’s heavy intervention and was quoted at 46,680 against the greenback on Tuesday.

The Central Bank of Iran announced on Tuesday a plan to issue foreign currency bonds for the first time to provide those interested in forex investment with more mainstream instruments.

CBI Governor Valiollah Seif told IRNA that by issuing foreign currency bonds, CBI aims to lure investors keen on dabbling in the foreign exchange market.

The forex bond plan will be unveiled within two weeks, he added. 

Seif made the statement as part of the banks’ efforts to dissuade investors away from the forex market that is experiencing volatile days on the back of rial weakening to record lows.  

He added that the National Iranian Oil Company is also planning to issue foreign currency bonds of its own, which will take place when the permits are granted.

According to Seif, CBI’s menu of currency investment includes measures that would provide safe investment options combined with reasonable yields for the public. 

After repeatedly warning investors speculating about the fall of the rial that they were heading for losses because his bank could control the foreign exchange market, the CBI chief has resorted to forex bonds to curb the heated demand for hard currency.