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 2026

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

Ryosuke Takemura, OECD policy adviser, argued that the organisation’s role is ‘not to solve these issues one by one’
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2026 Asia-Pacific Tax Awards
Monica Erasmus-Koen and her Taxtimbre team will be responsible for building the firm’s TP capability in the competitive Netherlands market
Howden’s Rian Bahia explains how tax insurance can address known risks, unlock transactions and offer an alternative route through disputes and uncertainty
Haynes Boone’s new London partner, Alexandra Ueno-Park, argues that one-size-fits-all policies, billable-hour targets and outdated networking expectations can hold talent back
Death, taxes and Deloitte hoovering up trophies at an ITR awards night. Isn’t that the saying?
AI, pillar two and joint audits could define the next era of tax controversy, says Baker McKenzie tax partner Ariane Calloud
Gregor McMillan of Howden explains how insurance-backed financing can help businesses and funds unlock liquidity from tax receivables and other contingent claims
The arrival of Alex Anderson swiftly follows that of funds tax specialist Stuart Alter and suggests the Tier 3-ranked firm has higher ambitions
One of the two appointments is EY’s Gordon McIntosh, who becomes the big four firm’s second senior tax departure in September
Gift this article