Tax Incentives

The tax incentives, subject to certain conditions, are as follows:

Corporate tax ('CIT') exemption is available, on income from exploitation and extraction of mining companies, services provided by hotels, hospital and tourism industry, foreign companies producing branded products in Iran and exporting at least 20% of products by utilizing resources of domestic companies and companies engaged in information technology, for following periods:
- 5 years if activities are performed in areas other than Free Trade Zone ('FTZ') or Special Economic Zone ('SEZ')
- 7 years, which may be extended to 20 years (See incentives under FTZ below), if activities are performed in FTZ or SEZ
- 10 years if activities are performed in less developed regions
- 13 years, which may be extended to 20 years (See incentives under FTZ below) , if activities are performed in FTZ and SEZ of less developed regions
- Additional benefits
  - CIT exemption may increase for an additional 1 year where the company employs more than 50 employees and there is a minimum annual increase of 50% of employees each year
  - For less developed region – CIT exemption is available even after the expiry of tax holiday period provided the taxable income is twice the registered and paid-up capital of the company
  - For other regions – 50% of CIT exemption is available even after the expiry of tax holiday period provided the taxable income is equal to the registered and paid-up capital of the company
  - 50% of CIT exemption is available to foreign companies, manufacturing branded goods in Iran while using domestic company’s capacities and exporting at least 20% of their production, even after the expiry of tax holiday period
CIT exemption on income derived from agricultural activities
CIT exemption on income derived from export of non-oil goods, services and agricultural products and on 20% exemption on income derived from export of raw materials

Free Trade Zones ('FTZ')

The free trade zones are those parts of the Iranian territory that function according to the special laws and bylaws. These zones are also excluded from the domain of the customs authorities and enjoy the full freedom for the inflow and outflow of goods and commodities. Iran has 7 free trade zones which are located across the country. Unique geographical locations, sufficiently developed infrastructure and the foreign investment incentives provide ample opportunity for investments in such zones.

Incentives available for Investments in FTZ:

CIT exemption for a period of 20 years from the date of commencement of economic operations of the company
No restrictions on amount of foreign investments
No restriction on entry and exit of capital and profits
Transfer of partly manufactured goods outside FTZ without customs duties
No customs duties on imports from regions outside FTZ

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