Crypto tax law proposed in Iran by the Iranian National Tax Administration (INTA) which plans to generate tax from the cryptocurrency exchanges doing business in the territories of Iran. INTA also urges the Iranian Government to legalize crypto exchanges, their services, and activities on the pretext that the restrictions may substantially reduce the targeted tax.
Iran is usually considered an investment-friendly country not because it has the best business environment. However, the reason it being an investment-friendly state is that it has been under several sanctions imposed by a number of countries. But mainly most of these sanctions are imposed by the US Government and the UN. The country is even included in the FATF’s ‘grey list’ as well because it fell short of meeting certain compulsory requirements.
But with all these sanctions in place, yet the country is quite friendly when it comes to crypto and blockchain adoption. It is fair enough for Iran to adopt this technology because it needed to keep its economy in balance. Even when Iran too was facing the Covid-19 pandemic’s turmoil, none of the sanctions were lifted. The whole world felt no repentance when Iran was struggling to provide its citizens the required medical assistance and supplies. In these circumstances, any type of foreign investment was a kind gesture for Iran which was embraced with arms wide open.
One such initiative which brought foreign investment into Iran was the legalization of crypto mining. Iranian Government itself helped miners in establishing their mining farms in the country and ensured that they were facilitated to the fullest. This was a major step and it indeed turned out to be a great source of economic building for the Government of Iran. With the mining industry in place, the country also saw a huge rise in the growth of crypto exchanges within. However, while the mining was legalized yet the crypto exchanges and their activities were not legalized officially.
Now there has recently been a proposal presented to the Iranian Government concerning the legalization of crypto exchanges as well. The proposal has been placed by the Iranian National Tax Administration (INTA) for the purposes of tax generation from crypto exchanges. INTA has proposed in the draft that it has become necessary to legalize crypto derivatives. Only those exchanges should be authorized to conduct business that is duly authorized by the authorities. The carrying of business by an unauthorized crypto derivative should be stopped immediately.
INTA also proposed that in case there is non-compliance by any exchanges, then the law should provide for heavy penalties. However, according to INTA, the initiative of legalizing crypto exchanges is in favor of the state as well as for crypto exchanges. The authority suggested that if legalization is not provided for then it would have negative impacts. For instance, non-legalization would encourage the creation of black markets while taxpayers would try to avoid taxation.
The draft proposal of INTA also contained a provision for submission of information and record by crypto exchanges. INTA wants that exchanges should provide to it the data concerning their customers, their business activities, and income statements. The law is under consideration for the time being and a decision on the law isn’t expected any sooner.