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

Jaydeep Menon explains how Frazier & Deeter built a specialist practice which helps UK start-ups expand into the US and why private equity backing is accelerating its ambitions
As joint audits, data sharing and pillar two reshape tax controversy, multinational groups can no longer afford to manage disputes one jurisdiction at a time
Brazil's tax system is being reshaped by VAT , pillar two and TP reform. Fallet explains why those changes convinced him to lead a new practice
The agreement with Daribatech, alongside recent high-profile investment in talent, suggests the firm is gearing up for a significant push in the region
Several factors have led to a steady transition of TP work away from traditional advisers and towards full-service law firms, DLA Piper’s new TP leader says
Julian Balson's departure from EY's Tier 1 tax controversy practice for lower-ranked Fieldfisher represents one of the more eye-catching UK hires of the year
Former IRS commissioner Danny Werfel argues that the biggest obstacle to AI adoption in tax is not technology, but trust, and introduces a practical AI risk framework to help
Howell takes a deep dive into how he led the landmark PepsiCo dispute, discusses the ATO's enforcement priorities, and emphasises KordaMentha's market ambitions
Global tax leader David Linke said that the TaxSim gaming programme could replace aspects of traditional face-to-face learning
Former ATO economist Craig Silverwood is joining from Australian firm MinterEllison
Gift this article