Crypto Miners Can Benefit From Tax Holiday

EghtesadOnline: Cryptocurrency miners will be eligible for tax exemption if, like non-oil exporters, they repatriate their overseas earnings, Iran's National Tax Administration said.

News ID: ۷۴۸۴۲۷

14 September 2019

As per INTA regulations crypto mining is a taxable business, like other industrial activities, and should follow requirements of the Central Bank of Iran in repatriating their overseas earnings, IRNA reported.

Special tax regulations regarding the location of industrial units and their distance from major cities do not apply to crypto mining units, INTA says.

Regulations restrict the building of manufacturing units from major urban areas, for instance 120 km from Tehran city, 50 km from Isfahan city or 30 km from other large cities, Financial Tribune reported.

Lucrative Business

In July and after months of speculation over the fate of mining and trading cryptocurrencies in Iran, the government on Sunday said it recognizes crypto mining as a legal industrial activity.

Cryptocurrency mining in Iran has become a lucrative business in recent years due to the extremely low-cost of (subsidized) electricity. Each kilowatt-hour costs 0.5 cent.

Regarding recent government concern over the possibility of capital flight because miners were using cheap electricity, crypto miners claim 70-80% of the revenue from the production of cryptocurrencies goes back to their production cycle and as such reports of capital flight are incorrect and irrelevant.

As per new regulations, miners can either directly use the national power grid or use mini-grids for their crypto business.

Electricity bills for miners will be based on average power export rates in rials and as per forex parity rates in the secondary market, known as Nima (Persian acronym for Integrated Forex Deals System).

Iran exports power to neighbors, namely Afghanistan, Iraq and Pakistan, and power swap deals with Azerbaijan and Armenia.

Those who want to have their own power plants should subscribe to the national gas grid and gas rates will be equal to 70% of natural gas export prices.