Iran: VAT exemption for hybrid and electric vehicles

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Iran: VAT exemption for hybrid and electric vehicles

AdobeStock_179693284_hybrid

According to the law on clean air, adopted by the Iranian Parliament on July 16 2017, Mohammad Masihi, an official from the tax administration, stated that all home-grown, eco-friendly, zero-emission hybrid and electric cars and motorcycles will benefit from a tax exemption.

The old and high emission transport system is one of the main causes of pollution in metropolises and should be replaced by an eco-friendly transport system. However, this replacement requires strong infrastructure, bears high costs and involves lot of resources.

According to Article 9 of the new law, the Ministry of Interior, in cooperation with the Ministries of Industry and Mines, Commerce and Economic Affairs and Finance, is obliged to update the urban public transport system with a priority on cities with a population of more than 200,000. The five-year programme is planned to include granting loans, offering incentives and removing import duty on hybrid and electric cars and motorcycles.

Local companies will be exempt from paying VAT on such vehicles. As a reminder, the current VAT rate for the fiscal year is 9%.

najm.jpg

Ali Najm (ali.najm@eurofast.eu)

Eurofast Global

Tel: +357 22699222

Mobile and Telegram: +98 9123138762

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

The US president also unveiled a new 50% levy on copper imports; in other news, a UK wealth tax proposal has been criticised by the Institute for Fiscal Studies
Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Rafael Tena tells ITR about the ‘crazy’ Mexican market, ditching the hourly rate, and refusing to grow his fledgling firm in an ‘unstructured way’
It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
Gift this article