Iran Gov’t to Levy Taxes on Forex, Gold Dealers

EghtesadOnline: Iran National Tax Administration has announced details of the government’s initiative to levy taxes on people purchasing high amounts of foreign currencies and gold coins as investments, signaling the serious drive to discourage the public from changing their rials to earn windfall profits.

News ID: ۷۸۳۰۶۷

26 June 2018

“Whoever purchases or sells foreign currencies to an amount equal to or higher than $5,000 will have their information registered in the country’s comprehensive information system,” Seyyed Kamel Taqavinejad was also quoted as saying by IBENA.

The official noted that INTA will review their information and if they already have a tax file, it will be scrutinized and if not, a file will be opened for them.

“The amount of their taxes will be calculated based on the nature of their dealings and their real or legal identity,” Financial Tribune quoted him as saying.

The scheme is important since Iranians have increasingly turned to foreign currencies and gold coins as safe havens after Iran’s national currency went on a downward spiral in the past six months.

The rial’s slide halted for a number of weeks after US President Donald Trump on May 8 announced the reimposition of harshest sanctions in history in August and November against Iran, as he withdrew unilaterally from the country’s nuclear deal with world powers.

However, the rial’s declining trajectory exacerbated in the past week and it fell to historic lows on Sunday. It changed hands for more than 90,000 rials against the US dollar, more than twice the government’s unified rate of 42,000 rials. The rial, however, regained some ground on Monday and was traded for about 80,000 for each US dollar after the new government decision was announced.

Taqavinejad noted that people opting for gold as safe haven are also not exempt, as “those who have purchased or sold gold coins and foreign currencies have until the end of the [third Iranian month] of next year [on June 21, 2019] to finalize their tax declaration”.

That one-year window, he said, will mean that the current market will not be affected very much.

INTA first announced that it aims to levy taxes on foreign exchange and gold coin dealers in January. Shortly after in February, Taqavinejad said his organization has coordinated with the Central Bank of Iran in line with the scheme and received the list of people subjected to it.