TEHRAN: Iran’s National Tax Administration (INTA) issued a new directive to the banking system, devising a ceiling for loans and a slew of other banking services for taxing individuals and businesses.
The head of INTA Seyyed Kamel Taqavinejad communicated the directive that devises a ceiling for natural or legal persons applying to receive all kinds of loans and other banking services such as letters of credit (L/C) or bank guarantees both in foreign exchange or rial from banks and credit institutions, reports Banker.
The ceiling has reportedly been set to clarify tax issues pertaining to the services.
According to the directive a legal entity can receive bank services worth up to 3 billion rials ($92,000) while the ceiling for natural persons has been set at 1 billion rials ($30,500).
It also states that the “rial equivalent of the allocated loans or foreign exchange services based on the rate set by the Central Bank of Iran will be the main criterion deciding whether or not the services will be subject to taxation”.
The directive has been issued based on Direct Taxation Law first approved in 1987, which underwent considerable changes in the parliament in the last fiscal year that ended on March 19, 2016.
A part of the law states that any natural or legal person applying for loans from the banking system or credit institutions will first have to obtain two certificates: A finalized tax clearance certificate and a certificate issued by INTA confirming that such information has been verified by banks and credit institutions.
The original law passed by the Majlis had stated that “executive regulations pertaining to the law will be devised and subsequently communicated by Iran’s National Tax Administration and the Central Bank of Iran.”