Title D - On Miscellaneous Provisions

Article 132 80% of the income from producing and mining activities, which is derived and declared by producing and mining enterprises of cooperative or private sectors for whom exploitation licenses are issued, or with whom extraction and sale contracts are concluded, from the beginning of the year 1381* onwards by relevant ministries, shall be exempt from the tax set forth in the Article 105 hereof for a term of 4 years beginning from the date of exploitation or extraction. As regards the less developed regions, the exemption shall apply to 100% of the income for a term of 10 years.

Note (1) The list of less developed regions shall be prepared by the State Organization of Management and Planning and ministries of Economic Affairs and Finance and Industries and Mines, and will be approved by the Council of Ministers, for the rest of the term of the third economic, social and cultural development plan of the Islamic Republic of Iran, and also at the beginning of the term of each of the forthcoming development plans.

Note (2) The exemption provided under this Article shall not apply to the income of producing and mining units established within a 120-kilometer radius from the center of Tehran or within 50-kilometer radius from the center of Isfahan and also within a 30-kilometers radius from the administrative centers of provinces and cities with a population of more than 300,000, according to the latest census, except for industrial townships established within the same 30kilomenres radius from the latter province centers and cities.

Note (3) All enterprises for internal and international tourism that hold exploitation permit from the Ministry of Culture and Islamic Guidance shall enjoy an annual exemption with regard to 50% of their applicable taxes.

Note (4) The rules for determining the date of commencement of exploitation of exempt enterprises subject to this article, and also for determination of the confines referred to in the Note 2 above, will be specified and declared by the ministries of Economic Affairs and Finance and Industries and Mines.

Article 133 100% of the income derived by rural, tribal, agricultural, fishermen, workers, employees, students and pupils cooperative societies and their unions shall be exempt from taxation.

Note The government is obligated to refund to the Central Organization of Rural Cooperatives of Iran an amount equal to the income tax attributable to that part of the said organization’s declared profit, which is allocated, by virtue of its general meeting’s approval, for investment in rural cooperatives. The refund will take place, after collecting the tax and remitting it to the account of public revenue of the country, out of a special item to be included in the state budget for the same purpose.

Article 134 The income derived from educational and training activities by non-profit schools, whether elementary, junior or senior secondary, technical or vocational, or by nonprofit universities and higher education institutions, as well as the income derived from taking care of mental and physical invalids by the institutions engaged in such activities, shall be exempt from taxation, provided the aforesaid. institutions have permission from the respective authorities. The income of the institutions and clubs having permission from the Physical Training Organization shall also be exempt from taxation, if it is derived purely from sport activities.
The executive regulations of this article will be approved by the Council of Ministers on basis of the proposal of the Ministry of Economic Affairs and Finance.

Article 135 Deleted.

Article 136 The money paid by the insurance firms on account of life insurance, which the beneficiaries receive under insurance policies, shall be exempt from taxation.

Article 137 The treatment expenditures paid during a tax year by a taxpayer for his treatment, or for the treatment of his spouse, children, father, mother, brother, and sister who are dependent on him, shall be accepted as deductible from his taxable income, provided the payment of expenditure is certified by the treating institution or physician that have received the money, if they are residing in Iran. If the treatment takes place outside Iran because of the lack of necessary medical possibilities, as confirmed by the Ministry of Health and Medical Treatment and Education, then the payment of the said expenditure must be certified by the official authorities of the Islamic Republic of Iran in the country where the treatment is effected, or by the Ministry of Health and Medical Treatment and Education. The insurance premiums paid by individuals to the Iranian insurance institutions with respect to life and health insurance will also be deductible from the taxpayer’s taxable income.
In case of invalids and hardly curable special patients, the expenses incurred for taking care of them and for their rehabilitation shall also be deductible, besides the aforesaid expenditures, from the taxable income of the invalids and patients or from the income of the persons to whom they depend.

Article 138 Any part of the declared profit of private and cooperative companies that is used in the same year for development, reconstruction, renovation or completion of existing industrial or mining units of those companies, or for setting up of new industrial or mining units, shall be exempt from 50% of the applicable tax set forth in the Article 105 of this Act, provided the permission for development or completion, or for establishment of new industrial and mining units, in context of specific investment projects, is obtained from relevant ministries beforehand. In case the expenses incurred in each year for implementation of the said project or projects exceed the declared profit of the same year, or if it is less than the cost of the investment project, the company can benefit from the said exemption, up to the aforesaid excess or the balance of the cost of full implementation of the project, when computing the income to be declared for subsequent three years at maximum.

Note (2) The new industrial units established by taking benefit from the exemptions mentioned in this Article shall not be entitled to the tax exemptions provided under the Article 132 of the present Act.

Note (3) If the factories that are located within the watershed basin of Tehran and their employees are not less than 50, move their total installations outside a 120-kilometer radius of the center of Tehran, then they shall be exempt - according to the criteria to be determined by the Ministry of Economic Affairs and Finance and the respective ministry, as the case may require - from income tax on their relevant industrial activities for 10 years, beginning from the date the exploitation in such new location would start.

Note (4) For the purposes of the present Act, the watershed basin of Tehran comprises the west watershed area of Hablehrud of Garmsaar, east watershed area of Ziyaran River and all watershed areas of the rivers Damavand, Jajrud, Darabad, Darband, Evin, Farahzad, Kan, Karaj and Kordan, and its boundaries are as follows:
on the north, the ridge of Elburz mountains, which waters flow to the desert of central Kavir;
on the east, the west bank of river Hablehrud of Garmsaar;
on the west, the east bank of the river Ziyaran; and
on the south, the lines extended from west to east from the intersection of rivers Ziyaran and Shur up to the thalweg of Namak Lake, and westward up to the crossing point with the course of Hablehrud of Garmsaar.

Note (1) Should the company stop the project before being completed, or fail to start the exploitation phase within one year from the deadline set forth in the investment project, or if it would terminate, liquidate or transfer the same within five years from the date of commencement of exploitation, then a sum equal to the exemptions provided in this article for implementation of the project plus the fines of the Article 190 hereof will be collected from the company.

Article 139 (a) Endowments, offerings, premiums, cash and non-cash aids and gifts received by the Razavi holy sanctuary, splendid sanctum of Hazrat Abdolazim (peace be upon him), sanctuary of Hazrat Ma’soumeh (upon her be the greeting of God), shrine of Hazrat Ahmad ben Musa (peace be upon him), Shah Cheragh, holy shrine of Hazrat Imam Khomaini (upon him be the favor of God), mosques, Hosainiyehs*, Takyehs°Y and other blessed sanctuaries shall be exempt from taxation. Recognition of other blessed sanctuaries is entrusted to the Endowments and Charitable Affairs Organization.
(b) Cash and non-cash aids and gifts received by the Red Crescent Organization of the Islamic Republic of Iran shall be exempt from taxation.
(c) Cash and non-cash aids and gifts received by pensionary saving funds, Organization of Health Services Insurance, Social Security Organization and also the insurance premiums and pension contributions paid by employees and employers and the accrued fines shall be exempt from taxation.
(d) Cash and non-cash aids and gifts received by the Islamic science schools shall be exempt from taxation. Recognition of Islamic science schools is entrusted to the managing council of the Qum* Religious Science Society.
(e) Cash and non-cash aids and gifts received by the foundations of the Islamic Revolution shall be exempt from taxation. Recognition of the foundations of Islamic Revolution is entrusted to the Council of Ministers. (f) Any part of the income of the State Fund for Development of Endowments spent for development of endowments shall be exempt from taxation.
(g) The income of persons out of benevolent contributions of the High Spiritual Leadership [Vali-e Faqih] or out of Khoms* or Zakat* shall be exempt from taxation.
(h) Any part of the income of public endowments used, in conformity with the religious criteria, for purposes like Islamic propagation; studies in cultural, scientific, religious and technical fields; inventions; discoveries; education and training; hygiene and treatment; construction, repair and maintenance of mosques, praying oratories, religious science societies, Islamic science schools and government schools and universities; ceremonies of religious mourning and giving victuals; repairing of antiquities; development and
improvement affairs; payment of educational expenditures or loans to pupils and students; aids to the poor and those suffered from flood, earthquake, fire, war and other unexpected catastrophes, shall be exempt from taxation, provided that the aforesaid income and expenditures are confirmed by the Endowments and Charitable Affairs Organization;
(i) Cash and non-cash aids and gifts received by registered charities and public-service institutions shall be exempt from taxation, provided that such aids and gifts are used, in conformity with the statute of relevant institutions, for the purposes mentioned in the above paragraph "h" of this article and the State Organization of Tax Affairs supervises over their income and expenditures.
(j) Cash and non-cash aids and gifts received by professional associations, parties and non-government groupings that are licensed by relevant authorities, and also the membership fees paid by their members and fractions withheld from income or wages of their members and remitted to the account of those organizations in accordance with relevant laws and regulations, shall be exempt from taxation.
(k) Endowments of religious societies and missions of the religious minorities mentioned in the Constitution, and also any cash and non-cash aids and gifts received by them, shall be exempt from taxation, provided their official status is approved by the Internal Ministry.
(1) Publishing, journalistic, cultural and art activities performed on the basis of the permit of the Ministry of Culture and Islamic Guidance, shall be exempt from taxation.

Note (1) Receipts from non-profit activities carried out for the purpose of achieving the goals and responsibilities of the persons subject to this article through setting up of educational courses and seminars, publishing books and periodicals and ...* shall be exempt from taxation, provided such receipts are earned in conformity with their statutes and the State Organization of Tax Affairs has supervision over their income and expenditures.

Note (2) The rule of the Note 2 of the Article 2 of this Act shall apply to the taxable income of the persons subject to the present article.

Note (3) Executive regulations of this article shall be prepared by the State Organization of Tax Affairs. The Ministry of Economic Affairs and Finance will propose the same and the Council of Ministers vvill approve it.

Note (4) As for the cases where there exist permissions from Hazrat Imam Khomaini (upon him be the favor of God) or From the High spiritual Leader, the rule of the present article will be carried out according to the view of the High spiritual Leader.

Article 140 Deleted.

Article 141
A. 100% of the income derived from exportation of industrial finished goods and products of agricultural sector (including farming, horticulture, husbandry, poultry, fishery, forest and pasture products) and its conversional and complementary industries, and also 50% of the income earned from exportation of other goods that are exported for achieving the objectives of the exportation of non-oil goods, shall be exempt from taxation. A list of goods subject to this Article shall be proposed, in the course of the term of each development plan, by the ministries of Economic Affairs and Finance, Commerce, Agriculture and Construction Jihad and industrial ministries, and shall be approved by the Council of Ministers.
B. 100% of the income derived from exportation of different goods that have been, or will be, imported to Iran on transit, and are exported without making any changes in the substance thereof, or doing any works on them, shall be exempt from taxation.

Note The loss from export of tax-exempted goods sustained by the persons engaged in other non-export activities as well, shall not be taken into account in computation of the tax applicable to such other activities.

Article 142 The income of hand-woven carpet workshops and handicrafts and the income of their respective cooperatives and production unions shall be exempt from taxation.

Article 143 10% of the tax of companies whose shares are accepted, according to the relevant law, by the Acceptance Board for negotiation in the stock exchange, will be spared as from the year of acceptance and so long as such shares are not removed from the rate list of the stock exchange, provided that all transfers are made through the stock market agents and registered in the relevant books.

Note (1) Each transfer of companies’ shares and priority right of shares, and also transactions on other securities, through the stock market shall be taxed at a flat rate of 0.5% of the sale value of the shares and priority rights of shares, and no other taxes will be charged as income tax on transfer of shares and priority right of shares.
Stock market agents are required to collect, upon each transfer, the aforesaid tax from the transferor and remit it to the account determined by the State Organization of Tax Affairs, and to send the receipt thereof, together with a list containing the number and sale price of transferred shares and priority rights of shares, to the local tax affairs office within ten days from the date of the transfer.

Note (2) Each transfer of stocks, partnership shares, priority right of stocks and partnership share of partners in other companies shall be subject to tax at a flat rate of 4% applicable to their face value. In these cases no other taxes will be charged as income tax on such transfers. Those transferring stocks, partnership shares and priority right of shares are required to remit the applicable taxes to the account of the State Organization of Tax Affairs before the transfer would take place.
The registration departments or notaries public should receive, at the time of registration of changes or drawing up the transfer deeds, as the case may be, the certificate of payment of the applicable tax and enclose it to the file of registration or transfer.

Note (3) The premium reserve of joint stock companies accepted to the stock market shall be subject to tax at a flat rate of 0.5% and no other taxes will be charged on this income. The companies are required to remit the tax to the account of the State Organization of Tax Affairs within thirty days from the date of registration of the capital increase.

Article 144 Movable dowry; mahr*, whether movable or immovable; scientific awards; educational scholarships; as well as the income earned by inventors and discoverers on basis of their invention or discovery rights, shall be exempt from taxation in general. The income derived from research and studies by the centers holding research license from the competent ministries, shall also be exempt from taxation for a period of ten years from the date of enforcement of this amendment and according to the criteria to be stipulated in the regulations that shall be proposed by the ministries of Culture and Higher Education, Health and Medical Treatment and Education and Economic Affairs and Finance, and will be approved by the Council of Ministers.

Article 145 The interest received under any title shall be tax exempt in the following cases:
(1) the interest on deposits related to pension contributions and savings of employees and laborers held by Iranian banks, within the limits of the respective employment regulations;
(2) interest or bonuses accrued to saving accounts and various deposits held by the Iranian banks or authorized non-bank credit institutions. This exemption will not apply to the funds that banks or authorized non-bank credit institutions deposit in each other;
(3) bonuses accrued to the government and treasury bonds;
(4) interest paid by Iranian banks to the banks outside Iran on overdrafts and time deposits, subject to reciprocal treatment; and
(5) interest and bonuses accrued to participation bonds*.

Note Wherever the Direct Taxes Act refers to banks, the specified privileges, facilities, priorities and duties shall apply to the non-bank credit institutions established according to the law or by authorization of the Central Bank of the Islamic Republic of Iran, as well.

Article 146 All exemptions granted under previous laws and regulations for a certain period will remain in force, by due regard to the respective provisions, until the date of their expiry.
Note The tax on the interest accrued to the installment bonds of the Land Reform, will continue to be spared as before.

Article 147 Acceptable expenses for assessment of taxable income, as specified under the provisions of the present Act, shall consist of expenditures that are within the prescribed limits and are supported - to the extent required by the custom and usage - by documentary evidence and are exclusively connected with the earning of the enterprise’s income during the relevant fiscal term. If an expenditure is not envisaged under this Act or if it is beyond the limits stipulated herein, but the payment thereof is effected by virtue of a law or a decree of the Council of Ministers, then it shall be acceptable.

Note For the purposes of the present chapter, an enterprise means any legal person and the business proprietors subject to the paragraphs "A" and "B" of the Article 95 of this Act.

Article 148 The expenditures that are described hereunder and meet the conditions stated in the above Article will be acceptable in tax computation:>br> (1) the purchase price of the sold goods or the purchase price of materials used in the sold goods and services;
(2) personnel costs proportional to the services of employees and on basis of the enterprise’s employment regulations, including:
a) basic salaries or wages and regularly recurring benefits, whether in cash or in kind (the benefits in kind at their cost to the employer);
b) irregular non-recurring benefits, whether in cash or in kind, such as foodstuffs, productivity allowance, bonus*, New Year bonus’’`, overtime pay and travel expenditure and allowance. The limits of travel expenditure and allowance paid to directors, inspectors and employees traveling abroad to provide for the relevant enterprise’s needs, shall be determined under the regulations that will be prepared by the Ministry of Economic Affairs and Finance and the State Organization of Management and Planning, and will be approved by the Council of Ministers;
c) health and treatment expenses and payments for health and life insurance of employees, or for insuring them against accidents arising out of work;
d) retirement pension, survivors pension and termination of employment payments in accordance with the enterprise’s employment provisions, dismissal compensation and payments for buying-out of services according to the enacted laws and in respect of that amount of such payments that exceeds the relevant reserve account;
e) payments to the Social Security Organization in accordance with the relevant regulations and also an amount up to 3% of the paid annual salaries, as the employees’ savings, in accordance with the regulations to be prepared by the State Organization of Tax Affairs and approved by the Minister of Economic Affairs and Finance; and
f) funds reserved for financing the retirement pension, survivors pension, termination of employment payments, dismissal compensation and payments for buying-out of services of the enterprise’s employees, up to the amount of the latest monthly salaries and wages and the balance resulted from the adjustment of the previous years salaries. This rule shall apply to the reserves deposited in bank accounts so far, as well. (3) the rent paid for the enterprise’s premises in case of being rented. The amount of rental shall be determined on basis of the official deed* (if any), otherwise within the normal range;
(4) rental of enterprise’s machinery and equipment in case of being rented;
(5) costs of fuel, electricity, lighting, water and communications;
(6) funds paid in respect of various kinds of insurance relating to the operations and assets of the enterprise;
(7) royalties paid, as well as the duties, levies and taxes paid to municipalities, ministries, government institutions and their affiliates in connection with the activities of the enterprise (except for the income tax and its appendants and other taxes that the enterprise is obligated, under the provisions of this Act, to withhold from its payments to other persons and remit it, as well as the fines paid to the government and municipalities);
(8) research, experiment and education expenses, purchases of books, periodicals and compact disks, marketing, advertising and exhibition expenses, if such expenditures pertain to the activity of the enterprise, and on basis of the regulations to be proposed by the State Organization of Tax Affairs and approved by the Minister of Economic Affairs.
(9) expenditures related to the indemnification of damages caused by the operations or assets of the enterprise, provided that:
first, the occurrence of the damage is ascertained;
second, the type and extent of the damage are determined; and third, no other party is responsible for indemnification thereof under the provisions of the existing laws or agreements, or - at any event - the damage is not otherwise recovered.
Regulations concerning the realization of the above three conditions shall be approved by the Minister of Economic Affairs and Finance on basis of the proposal of the State Organization of Tax Affairs.
(10) cultural, sport and welfare expenditures paid in respect of workers to the Ministry of Labor and Social Affairs, up to a maximum amount of IRR 10,000 per each worker;
(11) reserves against doubtful receivables provided that:
first, the receivables are connected with the enterprise’s business;
second, they are, most probably, not recoverable; and third, the reserve is administered under a special heading in the enterprise’s books of accounts until the claim is recovered or its incapability of being recovered becomes ascertained;
Regulations concerning this paragraph will be approved by the Minister of Economic Affairs and Finance on basis of the proposal of the State Organization of Tax Affairs.
(12) losses of real and legal persons, if ascertained by examination of their statutory books of accounts and in conformity with the regulations, can be carried forward and be offset against the income of subsequent year or years.
(13) small expenses incurred in connection with the premises of the enterprise, if such expenses are customarily born by the tenant and the place of business is rented;
(14) expenses incurred for maintenance and upkeep of the premises, if the place of business is owned by the enterprise;
(15) transportation expenses;
(16) expenses related to transportation of employees, entertainment and warehousing;
(17) fees paid in proportion to the services rendered such as commission, brokerage, legal fees, consultation fees, conference fees, auditors fees and fees for administrative, financial and inspection services, expenses related to software and designing and setting up of systems needed for the enterprise, expenditures for other specialized services pertaining to the activities of the enterprise and the fee of the legal inspector;
(18) fees paid or allocated to banks, cooperative funds and authorized non-bank credit institutions for the carrying out of the enterprise’s operations;
(19) price of office supplies and office equipment that are usually consumed within one year;
(20) cost of repair and maintenance of machinery and work equipment and also the cost of replacement of spare parts, provided it would not be considered as a basic repair;
(21) abortive mine exploration expenditures;
(22) membership and subscription fees paid in connection with the business of the enterprise; (23) bad debts in excess of the reserve for doubtful receivables and if it is proved by the taxpayer to be unrecoverable;
(24) currency exchange losses computed in accordance with accepted accountancy practice, provided it is applied consistently from year to year by the taxpayer;
(25) normal wastage of production;
(26) reserve of payable acceptable expenses related to the assessment year;
(27) acceptable expenses related to previous years, the payment or allocation of which is realized in the tax year under examination; and (28) expenses for purchasing of books and other cultural and art goods for employees and their dependants, up to a maximum amount equal to 5% of the exemption threshold of the Article 84 hereof in respect of each individual.

Note (1) The expenses that are not mentioned in the present article, but are considered to be related to the earning of the enterprise’s income, shall be accepted as deductible expenses on basis of the proposal of the State Organization of Tax Affairs and approval of the Minister of Economic Affairs and Finance.

Note (2) Directors and owners of a juridical person’s capital shall be considered as the enterprise’s employees, in case they are engaged in salaried positions of the enterprise. In the enterprises other than juridical persons, however, the salary and fringe benefits paid to the owner of enterprise and his spouse and children who are dependent on him, shall not be considered as acceptable expenses, except for service-related travel expenditure and allowance, which shall be subject to the paragraph (b)(2) of this Article.

Note (3) For computation of the tax applicable to the cooperative companies and unions, the reserves mentioned in paragraphs 1 and 2 of the Article 15 of the Cooperatives Act of 03/16/1350’’` and its later amendments shall be accepted as deductible expenses. In case of the cooperative companies and unions that have adapted, or will adapt, their status to the Law of 06/13/1370’’` concerning the Cooperative Sector of the Economy of the Islamic Republic of Iran, the reserve mentioned in the paragraph l of the Article 2 5 of the latter law, and also the cooperative and education allowance referred to in the paragraph 3 of the same article will be accepted as deductible expenses.

Article 149 Computation of depreciation of assets and establishment and capital expenses for the purpose of assessing the taxable income shall be made according to the following rules:
(1) any part of fixed assets whose value is subject to a decrease arising from utilization, lapse of time or other causes, regardless of price changes, will be depreciable; (2) the basis of depreciation shall be the cost of the assets;
(3) depreciation shall be computed from the date when the depreciable asset is put, in a usable condition, at the disposal of the enterprise. If a depreciable asset is put at the disposal of the enterprise during a month, such month shall not be taken into account in computation of depreciation, except for cinematographic films imported from abroad, which shall be depreciable as from the date of the first screening thereof. In case of factories, the phase of test exploitation shall not be considered as a part of exploitation period;
(4) establishment costs such as the expenses of registration of the enterprise, consultation fees and the like, as well as the expenses made in excess of the income related to the pre-exploitation and test exploitation phases may be depreciated in equal amounts up to a maximum duration of 10 years from the date of exploitation, except for the cases to be determined under the depreciation schedule referred to in the Article 151 of the present Act; and (5) if a depreciable asset is sold or machineries become unusable and, as a result, a loss is sustained by the enterprise, then the loss, equal to that part of the value of the asset that has not been depreciated minus the sale proceeds (if the asset is sold), shall in total be taken into account in computation of the profit and loss account of the same year.
Note As regards the computation of the tax applicable to the producers of Iranian cinematographic films that are made in Iran, the cost of the film cab be taken into account for determination of the taxable income in the first year of exploitation, or in subsequent years if the income of the film would not suffice.

Note As regards the computation of the tax applicable to the producers of Iranian cinematographic films that are made in Iran, the cost of the film cab be taken into account for determination of the taxable income in the first year of exploitation, or in subsequent years if the income of the film would not suffice.

Article 150 Depreciation methods are as follows:
(a) in cases where depreciation rates are determined under the depreciation schedule of the Article 151 of the present Act, the rates will be fixed and shall be applied in each year to the remainder of the cost of the asset after deduction of the depreciation computed for it in previous years; and (b) where a term is determined under the depreciation schedule of the Article 151 hereof, the depreciation of the cost of the property will be computed in equal yearly amounts over the prescribed term.
Note (1) Funds expensed for basic repair or alteration of a depreciable asset shall be considered as a part of the cost price of such asset.
Note (2) Software expenses of enterprises will be depreciable for a term of five years at maximum.

Note (1) Funds expensed for basic repair or alteration of a depreciable asset shall be considered as a part of the cost price of such asset.

Note (2) Software expenses of enterprises will be depreciable for a term of five years at maximum.

Note (3) In respect of depreciable fixed assets purchased for the purpose of reconstruction, substitution of production line, development or completion, the relevant enterprises are allowed to calculate the depreciation of such assets at a rate twice as much as the applicable rate of depreciation schedule envisaged under the Article 151 hereof, or for the half of relevant period prescribed by the same schedule, as the case may be.

Note (4) In case of capital lease of depreciable fixed assets, the method of registration of depreciation in the books of accounts of the parties of the transaction will be subject to the standards of accountancy.

Article 151 The depreciation schedule shall be prepared by the State Organization of Tax Affairs according to the approved criteria and shall be enforced after being confirmed by the Minister of Economic Affairs and Finance.

Article 152 Tax indicia are the factors employed, in respect of each business line and with due regard to the conditions of each business, for ex officio assessment of taxable income. They are as follows:
(1) annual purchase;
(2) annual sale;
(3) gross income;
(4) production volume of factories;
(5) value of the goodwill;
(6) total funds received by notaries public as recording fees, fees for collection of levies and consumption of duty stamps; or the sum of duty stamps used by the notary public; and (7) other factors adopted by the committee in charge of determination of coefficients.

Article 153 Tax coefficients are certain figures that when multiplied by the tax indications, the product will constitute the taxable income in cases of ex officio assessment.

Note When coefficients are applied to several indications, the average product will constitute the taxable income.

Article 154 The schedule of coefficients for assessment of taxable income shall be drawn up and notified in the following manner:
(a) a committee will be convened every year at the premises of the State Organization of Tax Affairs for scheduling the tax coefficients. The Committee shall consist of representatives of the State Organization of Tax Affairs and the Central Bank of the Islamic Republic of Iran, and also a representative from the Central Council of Guilds in respect of guilds, representative of the Medical Order Organization in case of medical businesses, or representative of the Iranian Chamber of Commerce, Industries and Mines with regard to other businesses. The Committee shall determine the detailed coefficients related to taxes of the area of Tehran with regard to each of the indications mentioned in the Article 152 of this Act, and in respect of various taxpayers and according to the types of their businesses, with due regard to the prevailing trend of transactions and economic circumstances. The Committee shall submit the list of coefficients to the State Organization of Tax Affairs. The State Organization of Tax Affairs shall notify, for implementation, the Committee’s decisions as the schedule of coefficients of the area of Tehran; and (b) the schedule mentioned in the paragraph (a) above shall be sent by the State Organization of Tax Affairs to tax affairs offices of the other cities.
As soon as the said schedule is received, a committee shall be set up in each area comprising the head of the local tax affairs office and head of the National Bank of Iran, and also the representative of the Central Council of Guilds in case of guilds, the representative of the Medical Order Organization in respect of medical businesses, or the representative of the Iranian Chamber of Commerce, Industries and Mines with respect to other businesses. The Committee shall base its study on the schedule so received and shall take into consideration the economic circumstances peculiar to the respective geographical district, and in case of necessity will introduce appropriate changes into the items of the schedule while giving justification for its measure. The outcome of the study will be reported to the headquarters of the State Organization of Tax Affairs. The Organization will study the report and to the extent it is convinced by the grounds presented in favor of changes introduced to the schedule, shall amend and notify it to the respective tax affairs office as the schedule of coefficients.

Note (1) In locations where the Central Council of Guilds or the Iranian Chamber of Commerce, Industries and Mines, or the Medical Order Organization are not formed, the local governor shall introduce a knowledgeable and informed person to participate in the Coefficient Committee instead of each of the representatives of those organizations.

Note (2) Presence of the representative of the State Organization of Tax Affairs or the head of the tax affairs office, and also the presence of the representative of the Central Bank or National Bank, whichever be applicable, shall be a requisite for establishing the quorum of the committee’s sessions, and its decisions shall be valid when taken by the votes of the majority of those present at the meeting.

Note (3) In cases where the taxable income subject to the present Act is to be assessed on ex officio basis, but no coefficient is determined for the relevant case under this Act or by the schedule of coefficients, the appropriate coefficient will be determined by the local Board of Settlement of Tax Disputes with due regard to the coefficient applicable to similar businesses.

Note (4) The Coefficient Committee shall invite the representatives of the unions of respective businesses or guilds to attend the meetings of the committee for giving explanations.

Article 155 The tax year is a solar year beginning at the first day of Farvardin’’` of each year and ending at the last day of Esfand’’` of the same year. However, in case of taxable juridical persons whose fiscal year, which is determined under their statute, does not coincide with the tax year, the income of their fiscal year, instead of tax year, will be taken as the basis for assessment of their taxable income. The time limit for submission of tax return, balance sheet and profit and loss account of such persons and payment of their taxes shall be 4 solar months after the end of their fiscal year.

Article 156 The tax affairs office shall examine the tax returns submitted within the legal time limit by taxpayers in respect of the income derived from each source, not later than one year from the expiry of the time limit stipulated for filing of tax returns. In case of failure to issue the assessment notice within the said time limit, or to serve the assessment notice on the taxpayer within three months after the expiry of the said period of one year, the tax return of the taxpayer will become final. If after the tax return becomes final, or after review of the case and issuing and serving of the tax assessment notice, whether the tax is finalized or not, it becomes evident that the taxpayer had have some hidden income or profitable activities whose applicable tax had not been claimed, then claim shall be made in respect of the income tax pertinent to such activities only, by due regard to the provisions of the Article 157 of the present Act. In this case, as well as in cases where the taxpayer’s tax return is considered as final, because of not being examined, the tax affairs office shall send, within 10 days from the date of issue of the tax assessment notice, a copy thereof, together with a justifying report, to the office of the Tax Disciplinary Prosecutor for examination.

Article 157 As for the payers of income tax who fail to file on time the tax return of the relevant source of income, and also in cases where such taxpayers are not required, under the provisions of this Act, to file a tax return at the deadline of the payment of the tax, the statute of limitation shall be five years from the deadline stipulated for the payment of the tax. The applicable tax shall not be claimable after the expiry of the said period of five years, unless the taxpayer’s income is determined and the tax assessment notice is issued and served upon the taxpayer not later than three months from the expiry of the said period of five years.

Note If for any reason the tax is claimed from a person other than the taxpayer, such claim, on what stage it might be, shall be considered as cancelled when this situation is confirmed by the Board of Settlement of Tax Disputes. In such cases the tax affairs office is required to claim the applicable tax from the real taxpayer within one year from the date of issue of the Board’s opinion and without observing the aforesaid statute of limitation. Otherwise, the statute of limitation shall apply.

Article 158 The State Organization of Tax Affairs may announce, by publishing an advertisement within the first half of each year, that in respect of some tax sources, wholly or partially, and in regions which it considers appropriate, the Organization will accept, without further examination, the tax returns to be filed on time by relevant taxpayers next year, and only a number of tax returns will be examined by the way of sampling and according to the provisions of the present Act.

Article 159 The funds paid as the tax on each income source through remittance to the account announced by the State Organization of Tax Affairs or through affixation of tax stamps, shall be taken into account at the time of assessment and computation of the final tax of the taxpayer. In case of payments in excess of the applicable tax, the overpaid amount shall be refunded.

Note The State Organization of Tax Affairs is authorized to collect at source and at related rates, all the taxes applicable to non-Iranian taxpayers and persons residing abroad.

Article 160 The State Organization of Tax Affairs shall have priority over other creditors for collection of applicable taxes and fines from taxpayers and persons responsible for the payment of the tax. Excepted are the claims of persons having rights on a pledged property and the service-related claims of workers and employees. The latter rule shall not prevent collection of the tax on transfer of the pledged property.

Article 161 In cases where the taxpayer’s tax is not yet finalized or the course of its execution is not completed and it is feared that some property or properties might be wasted by the taxpayer with the aim of tax evasion, the tax affairs office shall apply to the Board of Settlement of Tax Disputes for a writ of attachment, by presenting sufficient evidence. The Board shall issue an appropriate writ of attachment if it finds such measure necessary, and shall mention the relevant amount therein. The tax affairs office shall effect the attachment, up to the same amount, with regard to the taxpayer’s properties or funds held by him or by third parties. In this case the taxpayer or the third parties shall not be authorized, when the written notice of the tax affairs office is served on them, to dispose of the attached properties, unless they give security equivalent to the claimed amount. In case of infringement, they shall be subject to the punishment provided under the Note 2 of the Article 199 of the present Act, in addition to the payment of the claimed amount.

Article 162 Where several persons are considered to be responsible for the payment of the tax, the tax affairs office shall have right to refer to them, individually or collectively, for collection of the tax. Referring to every one of them shall not preclude the right of referring to others.

Article 163 The State Organization of Tax Affairs is authorized to require some or all of the taxpayers whose taxes are not withheld and remitted at the time of earning, to pay in the course of a year the applicable tax of the same year, as an on account payment and equal to a percentage of their latest finalized tax of previous years, or in proportion to the volume of their operations. In case of failure, the same on account amount shall be collected according to the provisions of the present Act.

Article 164 For the purpose of facilitating the payment of taxes and reducing the cases of taxpayers’ visits to tax affairs offices, the State Organization of Tax Affairs shall open a special account through the Central Bank of Iran in the National Bank of Iran, so that the taxpayers may apply directly to the branches or counters of the National Bank of Iran for paying their taxes to the said account.

Article 165 If some damages are sustained by a region of the country or by certain taxpayer or taxpayers due to accidents and perils such as earthquake, flood, fire, pests, draught, storm or other unexpected catastrophes and such damages are not indemnified by the ministries, government institutions,
municipalities, insurance organizations or publicinterest institutions, then the Ministry of Economic Affairs and Finance may deduct from the taxpayer’s taxable income of the same year and subsequent years a sum equal to the damages sustained. In case of the taxpayers that loose more than 50% of their properties due to the said incidents and are not able to pay their tax liability, the Ministry can spare all or a part of their liability or grant them long term installment plan for payment of their dues, after obtaining the approval of the Council of Ministers.
The regulations for implementation of this Article shall be prepared by the Ministry of Economic Affairs and Finance and will be approved by the Council of Ministers.

Note In the west and south regions of the country that suffered from the war and whose list shall be declared by the Council of Ministers on basis of the proposal of the Ministry of Economic Affairs and Finance, the taxpayers shall enjoy the following tax facilities:
(a) 50% of the said taxpayers’ income tax applicable to the income derived in such regions from the beginning of the year 1368’’` up to the end of 1372’’` shall be spared;
(b) One third of tax liability of such taxpayers accrued up to the end of the year 1367’’` on income derived in those regions will be spared against each year of their occupation in the same areas, beginning from the effective date of this amendment.
(c) Up to one third of taxes paid by those taxpayers in respect of the income derived in the said regions from the date of 06/30/1359’’` till the end of the year 1367’’`, will be credited each year against the taxes applicable to them in subsequent years in the same regions; and
(d) If a taxpayer is not able to continue his business in the said regions and provides evidence to that effect, which could be accepted by the Ministry of Economic Affairs and Finance, then his specified liability shall be wholly or partly spared.

Article 166 The State Organization of Tax Affairs may prepare certificates against advance payment of taxes and make them available to taxpayers for purchase. The certificates will be of registered type and untransferable. At the time of discharge of the taxpayer’s liability, a sum shall be deducted therefrom equal to his advance payment plus 2% of the same against each quarter of early payment of the tax.

Article 167 With regard to the taxpayers who can not afford to settle their tax liability, including the principal tax and fines, at once, the Ministry of Economic Affairs and Finance or the State Organization of Tax Affairs may agree with them to pay the same in installments, but not later than three years from the date of notification of their final tax liability.

Article 168 The government may conclude tax agreements with foreign states aiming at the prevention of double taxation and exchange of information with regard to taxpayers’ income and assets, and to implement such agreements after being approved by the Islamic Consultative Assembly’’`. The tax-related conventions and agreements already concluded with foreign states and approved by the legislature or the Council of Ministers before the effective date of this Act, will continue to be valid as long as they are not annulled. The government is obligated to review, within one year from the date of enforcement of the present Act, the previous conventions and agreements to find whether they should remain in force or are to be nullified, and to report its reasoned opinion to the Islamic Consultative Assembly’’`.

Article 169 If the use of some devices, methods, bills and forms is considered by the State Organization of Tax Affairs to be necessary for keeping the accounts of each group of taxpayers in a way to facilitate the assessment of their income, then the Organization may announce the same in a mass circulation paper up to the end of Day’’` of each year, whereby the taxpayers shall be obligated to observe such requirements as from the beginning of Farvardin’’` of the following year. Neglecting such orders will result in invalidity of the books of accounts of the taxpayers who must keep statutory books of accounts, and in case of other taxpayers it will result in imposition of a fine equal to 20% of the relevant source’s tax.
Article 169 bis The State Organization of Tax Affairs is authorized to issue economic card, inclusive of economic number, for real and juridical persons. The individuals or legal entities that become obligated, according to the announcement of the State Organization of Tax Affairs, to obtain economic card, shall be required to issue invoices for their transactions and insert their economic number in relevant invoices, forms and papers, and to submit the list of their transactions to the State Organization of Tax Affairs, in conformity with a directive that will be prepared and declared by the State Organization of Tax Affairs. The failure to issue invoices or to insert own economic number, or that of the other party of the transaction, as the case may be, also the use of one’s economic number for the transactions of others, or using the other person’s economic number for own transactions, shall be subject to a fine equal to 10% of the amount of the transaction made without observance of the above rules.
The failure to submit the list of executed transactions to the State Organization of Tax Affairs in conformity with the announced directive shall be subject to a fine equal to 1% of the transactions for which no list is submitted.
The aforesaid fines shall be claimed by the State Organization of Tax Affairs with due regard to the time limit of the Article 157 of this Act, and the taxpayer shall be required to take measure for payment thereof within 30 days from the date of service of the claim note. Otherwise, the taxpayer will be deemed to be protesting to the claim and the case will be referred to the Board of Settlement of Tax Disputes for examination and rendering a judgment. The verdict of the said board will be conclusive and binding, and the fine referred to above shall not be sparable and it will be collected through the execution procedure of the present Act.

Note If the observance of the aforesaid requirement is considered by the Board of Settlement of Tax Disputes to be beyond the ability of the taxpayer, the invalidity of the books of accounts or imposition of the fine, depending on the relevant case, shall not apply.

Note (1) Those making use of the economic number of others, together with the other persons whose economic number is used, shall be jointly and severally responsible for the payment of the income tax and fines set forth in this Article.

Note (2) If the parties to the transaction refrain from complying with each of the duties prescribed in this article, they shall be jointly and severally responsible. Should the buyer refrain from presenting his economic number, but the seller would declare the specifications of the buyer and subject of the transaction to the State Organization of Tax Affairs within a time limit of one month, then the seller will be exempted from the fine related to such failure.

Note (3) The juridical persons and proprietors of the businesses subject to paragraphs "A" and "B" of the Article 95 of this Act shall be required to keep all invoices related to their purchases in the relevant taxable year and a year thereafter, and to present the same to tax officials in case they would demand so. Otherwise, a fine equal to 10% of the invoices that are not presented shall be imposed.

Article 170 The forum for examination of any kind of disputes arising between the tax affairs office and taxpayers with regard to the assessment of taxes subject to this Act, will be the Board of settlement of Tax Disputes, except in cases where other fora are determined under the provisions of other articles of the present Act.

Article 171 The employees of the Ministry of Economic Affairs and Finance and those of the State Organization of Tax Affairs may not apply as the attorney or representative of taxpayers during their term of office or in the period they have status of readiness for office’’`.

Article 172 The following payments shall be deductible from the taxable income of the turnover of the year of payment and in connection with any source to be selected by the taxpayer: 100% of the funds remitted ex gratia to the accounts determined by the government for the purpose of reconstruction, help and the like, and also gratuitous payments, allocations and non-cash donations of persons, whether real or juridical, for repair, mobilization, construction or completion of schools, universities, centers of higher education, health and therapy centers, training camps, sanatoriums, welfare centers, libraries and government cultural and art centers, in conformity with the criteria to be determined by the ministries of Education, Culture and Higher Education, Health and Medical Treatment and Education and Economic Affairs and Finance.

Article 173 The present Act shall become enforceable as from the first day of Farvardin’’`, 1368’’`, and its provisions shall apply to all taxes and income taxes, in respect of which the reason of applicability of the tax or earning of the relevant income, as the case may be, is realized after the date of entry into force of this Act. It shall also apply to the income tax of real and juridical persons related to the fiscal year ending at the first year of enforcement of the present Act. All the other inconsistent laws and regulations shall be null and void in respect of those cases.
Note By enforcement of the present Act, the collection of evacuation duty referred to in the Article 8 of the Law of 1352* concerning the Moderation and Stabilization of Rentals shall be cancelled.

Article 174 The taxes on the income earned before the year 1368’’` and after the year 1345*, as well as the other direct taxes applied as a result of events occurred within the same interval, shall be considered as the outstanding taxes. In such cases the assessment and determination of taxable income, tax rates,
taxpayers’ duties and the statute of limitation shall be subject to the legal rules applicable at the time when the income was earned, and the examination and settlement procedures shall be governed by the present Act.

Note (1) If the date of earning of the income or occurrence of the reason of application of the tax, as the case may be, was prior to the year 1346’’`, but the relevant tax remained unpaid up to the date of approval of the present Act, then the tax in question will not be claimable any more.

Note (2) In case of a transfer subject to the Article 180 of the Direct Taxes Act of Esfand’’` 1345’’` and its later amendments that has taken place prior to the enforcement date of this Act, but the transferor passes away after the latter date, the transferred property shall be added to the shares of inheritance attributable to the respective heirs and the tax thereon, after deduction of the sums paid previously as the shares of inheritance, shall be collected according to the relevant provisions of this Act.

Article 175 All pecuniary amounts of this Act will be adjustable, once per two years, in harmony with the rate of inflation and by virtue of the proposal of the Ministry of Economic Affairs and Finance and approval of the Council of Ministers.

Article 176 The State Organization of Tax Affairs may collect taxes subject to the present Act, whether final or assessed, through cancellation of stamps. The regulations for carrying out of the present Article shall be prepared and implemented by the State Organization of Tax Affairs after being approved by the Minister of Economic Affairs and Finance.

Article 177 Taxpayers may submit, separately and against receipts, the tax returns subject to the present Act, which they are required to file in each case, to the tax affairs office local to their place of dwelling. In such cases the tax affairs office shall record the event in the taxpayer’s file, and shall dispatch, within three days, the submitted tax return to the respective tax affairs office for taking necessary measures.
Submission of tax return to the tax affairs office of the place of dwelling shall have the same effects as the one filed with the relevant tax affairs office. The rule of the present article shall also apply in cases where the taxpayer files, by mistake, his tax return with another tax affairs office within the respective city/town.

Note (1) Where the last day of the deadline or time limit for submission of the tax return or other papers, which the taxpayer should file according the provisions of this Act, corresponds to official or public holiday or holidays, the first day following such holiday or holidays, as the case may be, shall be considered as a part of the respective deadline or time limit for submission of the tax return or other papers.

Note (2) Submission of tax returns and payment of taxes of the taxpayers residing abroad and of the enterprises and companies whose principal center is located abroad, shall be effected by their representatives, should they have any representatives in Iran.

Note (3) The businesses proprietors are required to declare in writing the commencement of their activity, within four months from the date of starting the business, to the local tax affairs office. The failure to comply with that duty on time will be subject to a fine equal to 10% of the final tax. It would also result in deprivation from all tax facilities and exemptions as from the date they are identified by the tax affairs office. This rule will not apply to the business proprietors for whose activity a license or permit is issued by relevant authorities.

Article 178 In cases where the tax return or other papers, which the taxpayer is required by the regulations to submit, are received through the post office, the date of delivery of the same to the post office, in case of being ascertained, shall be considered as the date of filing with the respective authorities.

Article 179 A taxpayer with several dwelling places, is required to introduce one of such places as his principal domicile, otherwise, the tax affairs office may consider each of the taxpayer’s dwellings as his principal domicile.

Article 180 Every Iranian individual who may prove, by providing a certificate from the financial or diplomatic missions of the Islamic Republic of Iran in other countries, that he has paid, as resident, taxes on his income of a tax year in a foreign country, such person shall be considered, for tax purposes poses, to be resident abroad in the relevant year, except for cases of:
(a) having an occupation in Iran in the same year;
(b) living in Iran at least for six consecutive or interrupted months in the same tax year; or
(c) his staying abroad being for mission, treatment and the like.

Note If the Iranian real or juridical persons who reside in Iran but earn income from abroad and pay taxes thereon to the local state of the place of earning, would declare such earnings in their tax return or balance sheet and profit and loss account, as the case may be, in conformity with the provisions of the present Act, then the taxes paid by them outside the country or a part of the tax that can be attributed, in proportion with their total taxable income, to the income derived abroad, whichever be lesser, shall be deductible from their income tax.

Article 181 For the purpose of supervising the implementation of tax laws and regulations, the State Organization of Tax Affairs may dispatch bodies composed of three persons for inspecting and controlling the statutory books of accounts of taxpayers in accordance with the regulations to be prepared by the State Organization of Tax Affairs and approved by the Minister of Economic Affairs and Finance. If the taxpayer fails to present the statutory books of accounts, the taxable income of the relevant year shall be determined on basis of ex officio assessment, provided that the board referred to in paragraph (3) of the Article 97 of the present Act is in agreement with this measure.
previous years, for the purpose of obtaining necessary information and supplying the respective tax affairs office with the same. In case of necessity, they can take the books, records and documents of the previous years to the relevant tax affairs office, against a receipt.

Note The bodies subject to this Article may inspect, if authorized by the State Organization of Tax Affairs, all the books of accounts and financial records and documents of taxpayers, whether related to the year of inspection or the previous years, for the purpose of obtaining necessary information and supplying the respective tax affairs office with the same. In case of necessity, they can take the books, records and documents of the previous years to the relevant tax affairs office, against a receipt.

Article 182 Those obligated under the present Act to pay other persons’ taxes and also every one undertaking or guaranteeing the payment of someone else’s tax, as well as those becoming subject to a fine as a result of refraining from complying with the duties provided in the present Act, shall all be deemed as taxpayers and shall be treated, for the purpose of recovering their liabilities, according to the legal provisions related to the enforcement of tax collection.

Article 183 In cases where the transfer of a real property is effected through the Registration Department, the tax on the final transfer of the property should be paid in advance and the Registration Department shall transfer the property by registering the number of the tax clearance, issued from the competent tax affairs office, on the deed of transfer.

Article 184 Registration departments are required to send, at the end of each month, a full list of the companies and institutions registered during the same month together with the changes occurred with regard to the existing companies and institutions, as well as the names of real or juridical persons whose statutory books of accounts have been registered and the quantity and numbers of registered books, to the tax affairs office local to the residence of the relevant institutions.

Article 185 In all cases where the transactions related to the Chapter IV of the Title B and Chapters I and VI of the Title C of this Act take place by means of official deeds*, the notaries public shall be required to submit a summary list of each month’s transactions, till the end of the next month, to the relevant tax affairs office, on the premises, against a receipt.

Article 186 The issue, renewal or extension of validity of commercial cards and business or work permits of real or juridical persons by the competent authorities shall depend on the presentation of a certificate from the respective tax affairs office indicating the payment, or adoption of arrangements for the payment, of the finalized taxes. In case of failure of responsible officials to observe the said rule, they shall become jointly and severally liable for the payment of such taxes together with the relevant taxpayers.

Note (1) Grant of bank facilities to juridical persons and proprietors of businesses by banks and other financial institutions shall be subject to presentation of the following certificates: (1) a certificate indicating the payment, or adoption of arrangements for the payment, of the finalized tax liabilities; and (2) a certificate from the relevant tax affairs office indicating the receipt of a copy of financial statements presented to banks and other financial institutions.

Article 187 In all cases where the transactions subject to the Chapter IV of the Title B and Chapters I and VI of the Title C of the present Act take place by means of official deeds’’`, the notaries public are required - before registering the deed of transaction, the cancellation thereof by mutual consent of parties or its termination - to declare such events together with full description, specification, type and subject of the transaction to the tax affairs office of the district where the real property is located or the taxpayer dwells, whichever be applicable. Then the notary public shall take measure for registration of the deed of transaction, the cancellation thereof by mutual consent or its termination, as the case may be, after obtaining a certificate for execution of the transaction, and shall record the number of certificate and title of the authority issuing the same on the deed of transaction. The certificate for execution of transaction shall be issued within a maximum period of 10 days from the date of notary public’s announcement and collection from the respective taxpayer all tax dues related to the property under the transaction, such as the tax on rental income of real estates, and also collection of goodwill tax, business tax related to the premises of the property subject to the transaction, tax on incidental income or the tax on final transfer of real properties, whichever be applicable.

Note (1) With regard to the dispute concerning the amount of the assessed tax, the case shall be examined, out of turn, by the fora provided under this Act for settlement of tax disputes. Should the taxpayer desire to obtain the certificate for making transaction before the case is examined and a judgment is rendered by the dispute settling fora, the certificate will be issued after collection of the tax acceptable to the taxpayer and receiving a deposit or valid guarantee, such as promissory note, insurance policy, securities, real security and ...*, equal to the disputed sum.

Note (2) In cases where a sum of money related to goodwill is deposited, in pursuance to a court’s decision, with the Cash Office of the Justice Administration, or similar depositories, the respective officials shall be required, upon payment to the beneficiary, to deduct the applicable tax therefrom, by inquiring from the relevant tax affairs office, and to remit the same to the account of the State Organization of Tax Affairs.

Article 188 Those in charge of sale and cancellation of duty stamps are required to affix and cancel on each letter of attorney the necessary stamps according to the provisions of the present Act, and to record and certify such amounts in a special book that should be kept by lawyers for recording the amount of stamps used by them. The said book must be presented to the tax affairs office at the time of examination of the attorneys’ tax accounts. Otherwise, the failure to do so shall be considered a reason for rejection of their books for tax purposes.

Article 189 If the balance sheet, profit and loss account, statutory books of account and documents of legal persons, and those of the real persons subject to paragraphs "A" and "B" of the Article 95 hereof, are accepted during three consecutive years and their tax liability for each year is paid in the year of filing of the tax return without applying to the Board of Settlement of Tax Disputes, then a sum equal to 5% of the principal amount of their taxes for the said three years shall be paid to them out of the current collected funds, or will be credited to their tax account of subsequent years, as a reward for being an upright pay. This reward shall be granted to such taxpayers in addition to the benefits provided under the Article 190 hereof and it shall be exempt from taxation.

Article 190 On account payment of the tax applicable to the turnover of each fiscal year before the deadline set forth in this Act, will result in accrual of a reward equal to 1% of the prepaid amount per each month till the prescribed deadline. The reward will be deducted from the tax applicable to the same turnover. Any taxes paid after the time limit shall result in imposition of a fine equal to 2.5% of the relevant tax per each month. As for the taxpayers who are required to file a tax return, the starting point for computation of the fine with respect to the amount of the tax mentioned in the tax return, shall be the expiry date of the deadline for submission of the tax return. As regards the disputed balance, the said starting point shall be the date of claiming the balance. In respect of the taxpayers refraining from filing tax return, as well as those not being obligated to file a tax return, the starting point in question shall be either the expiry date of the time limit for submission of the tax return or the deadline for payment of the tax, whichever be applicable.

Note (1) If the taxpayers take measure for complying with their duties in respect of timely submission of tax return or balance sheet and profit and loss account and payment of the tax according to the tax return or balance sheet and profit and loss account, or arrange for the payment thereof, and also if they would act on time for presentation of their books of account, records and documents in relevant cases, then they shall be exempt, in cases referred to in the Article 239 hereof, from 80% of the fines set forth in this Act, provided they would accept the assessment notice or agree with the tax affairs office and pay the applicable tax or adopt arrangements for the payment of it. Such taxpayers will also be exempt from 40% of the applicable fines prescribed herein in case of paying, or arranging for the payment of, the tax within one month from the date of service of the final tax notice

Note (2) Should the interval between the filing of the taxpayer’s objection to tax assessment notice and the date of finalization of the tax would exceed a year, then the monthly fine of 2.5% set forth in this article shall not be claimable in respect of the period between the end of the said one year and the date of service of the final tax notice. The State Organization of Tax Affairs is required to take measure so that the examination and finalization of the taxpayers’ taxes would take place up to one year from the date of submission of their protest at maximum. Article 191 The fines provided under the present Act may be spared, totally or partially, when requested by the taxpayer and agreed upon by the State Organization of Tax Affairs. The Organization will take into account the evidence produced by the taxpayer to the effect that the noncompliance with the stipulated duties was due to reasons DIRECT TAXES ACT beyond his control. Due regard shall also be paid to the tax records of the taxpayer and his conduct as an upright pay according to the judgment of the Organization.

Article 191 The fines provided under the present Act may be spared, totally or partially, when requested by the taxpayer and agreed upon by the State Organization of Tax Affairs. The Organization will take into account the evidence produced by the taxpayer to the effect that the noncompliance with the stipulated duties was due to reasons DIRECT TAXES ACT beyond his control. Due regard shall also be paid to the tax records of the taxpayer and his conduct as an upright pay according to the judgment of the Organization.

Article 192 In all cases where a taxpayer or his representative are required, in accordance with the provisions of the present Act, to file a tax return in connection with the payment of the relevant tax, but fail to do so within the time limit prescribed in this Act, they shall be subject to a fine equal to 10% of the applicable tax.

Note The failure of legal entities and persons subject to paragraphs "A" and "B" of the Article 95 hereof to submit their tax return will result in imposition of a fine equal to 40% of the applicable tax, which shall not be sparable. As for the taxpayers who submit their tax return, the rule of this Note shall apply with regard to concealed income or to false expenditures that are unacceptable at the same time.

Article 193 If the taxpayers who are required by virtue of the present Act to maintain the statutory books of account, fail to submit their balance sheet and profit and loss account, or refrain from presenting their books of account, a fine equal to 20% of the tax for each case of such failures shall be applied to them. As regards the rejection of the books of accounts, a fine equal to 10% of the tax shall be imposed.

Note The failure to submit a tax return, balance sheet and profit and loss account in the period of tax exemption shall result in deprivation from the prescribed tax exemption with regard to the relevant year.

Article 194 The taxpayers whose tax returns are examined on basis of the provisions of the Article 158 hereof, and their taxable income so assessed and finalized reveals a difference more than 15% in comparison with the figure declared by them, shall become deprived from every kind of facilities and cases of sparing provided under the tax law, up to three years from the date of notification of the final assessed tax. Apart from that, the stipulated fines shall also be imposed, without being sparable.

Article 195 The fine applicable to the last directors of juridical persons for the failure to submit the tax return mentioned in the Article 114 hereof within the prescribed time limit, or for submission of a false tax return, shall respectively be 2% and 1% of the paid up capital of the juridical person at the date of liquidation.

Article 196 The offence of the hquidator or liquidators in connection with the distribution of the juridical person’s assets prior to the settlement of its tax affairs, or before giving the security of the Article 118 hereof, shall be subject to a fine equal to 20% of the applicable tax, which shall be collected from the liquidator or liquidators.

Article 197 As for the persons who are required under the provisions of this Act to submit statements, lists, contracts or specifications related to taxpayers, but fail to do so within the prescribed time limit, or submit false documents, the applicable fines shall be 2% of the paid salary in respect of salaries, and 1% of a contract’s total price in case of contracts. In all cases they shall become, together with taxpayers, jointly and severally liable for indemnification of the losses sustained by the government.

Article 198 In dissolved companies the directors shall have joint and several liability, together with the juridical person itself, for the payment of the entity’s income tax, and also for the taxes that the juridical person is required under the provisions of this Act to withhold and remit, where the latter taxes are related to the term of their office.

Article 199 Every real or juridical person who is required, according to the provisions of the present Act, to withhold and remit the other taxpayers’ taxes, but fails to comply with the prescribed duties, shall be subject to a fine equal to 20% of the unpaid tax, in addition to having joint and several liability with the taxpayer for the payment of the tax.

Note (1) In cases where the ministries, government companies or institutions or municipalities are obligated to withhold taxes, the responsible officials shall be subject to the punishment provided under the Administrative Offences Law.

Note (2) If a non-government juridical person is responsible for tax withholding, the respective director or directors shall also be convicted to corrective imprisonment from three months to two years, apart from having joint and several liability for payment of the applicable taxes and fines. This rule shall not apply to the director or directors of juridical persons who deposit securities with the State Organization of Tax Affairs for the payment of the above taxes.

Note (3) Where the withholder is an individual, such person shall be convicted to corrective imprisonment from three months to two years.

Note (4) Initiation of proceedings before judicial fora with regard to the Notes 2 and 3 of this Article shall be effected by the head of the State Organization of Tax Affairs.

Article 200 In every case that a duty or responsibility is set forth under the provisions of this Act for notaries public, and they fail to comply therwith, such persons shall become subject to a fine equal to 20% of the relevant tax in addition to having joint and several liability with taxpayers for the payment of the applicable tax or taxes. In case of repetition, they shall be convicted to the sentence stipulated under the Note 2 of the Article 199 hereof in conformity with the relevant regulations, as well.

Article 201 If the taxpayer cites, knowingly and with the aim of tax evasion, a balance sheet and profit and loss account, or books of accounts, records and documents that constitute the basis of tax assessment, but are prepared and arranged in a false manner, or if refrains from submission of tax return, balance sheet and profit and loss account for three consetutive years, such a taxpayer shall be deprived from all legal facilities and relieves in respect of that period, beside the imposition of fines and punishments set fort in this Act.

Note The prosecution of the committing taxpayers and initiation of proceedings against them before the judicial forums will be undertaken by the head of the State Organization of Tax Affairs.

Article 202 The Ministry of Economic Affairs and Finance or the State Organization of Tax Affairs may prevent the exit of the tax debtors, whose final liability exceeds IRR 10,000,000, from the country. The rule of the present article shall also apply to the responsible director or directors of private juridical persons in connection with the entity’s final tax liability, whether it relates to the income tax of the entity or to taxes that the entity is required to withhold and remit, provided the latter taxes pertain to the term of office of the said directors. The respective authorities are obligated to imple ment this article when declared by the said Ministry or Organization.

Note In case the taxpayers transfer their properties to their spouses or children with the aim of tax evasion, the State Organization of Tax Affairs may take measures for annulling the relevant deeds through the judicial authorities.

Article 203 Tax papers should, as a general rule, be served on the taxpayer in person and a receipt be taken on the second copy. Should the taxpayer be not available, the tax papers shall be served on a relative or employee of him at his place of abode or work, provided that in view of the serving officer the age of such persons would appear to be enough to recognize the significance of the papers, and there would be no conflict of interest between the taxpayer and the person receiving the process.

Note 1. If the taxpayer or his relatives or employees, in case of his absence, refuse to accept the process, and also when non of such persons is available at the relevant place, the serving officer shall record their refusal from accepting the process, or their absence at the place, on both copies of the tax notice, and shall post the first copy at the door of the place of residence or work of the taxpayer. The tax papers served in such manner shall be considered legal and the date of the posting shall be deemed as the date of serving on the taxpayer.

Note 2. The State Organization of Tax Affairs may use the registered mail services for the serving of tax papers. The mailman shall serve the copies of tax papers on the taxpayer in person or on a relative or employee of him at the relevant place, and shall get a receipt on the second copy. If the taxpayer or the said persons refuse to accept the process, the mailman shall take a note of that on the copies of the process, and shall post the second copy at the relevant address and return the first copy to the tax office. When none of such persons is available at the place, the postman shall record the date of calling at the place and also the phrase: "We shall revisit the place after 15 days from this date" on the copies of the notice, and shall post the second copy at the specified address, and return the first copy. Should the said persons be absent at the second visit, the mailman shall record the fact at the foot of the copies of the tax notice, and shall post the second copy at the relevant address, and give back the first copy to the tax office. The tax papers served in such manner shall be deemed as served at the date of posting.

Article 204 The serving officer shall specify the following points in the first and second copy of tax notice and sign it: (a) place and date of service specifying day, month and year, in letters and figures; (b) name of the person upon whom the papers are served, stating his relationship with the taxpayer; and (c) names, specifications and full addresses of witnesses, in cases referred to in the Note to the Article 203 of the present Act.

Article 205 Where the taxpayer is a government department or an institution affiliated with the government, the tax no tices shall be served on the director, deputy director or the head of the secretariat of such department or institution.

Article 206 If the taxpayer is a commercial company or any other juridical person, the tax notice shall be served on the director or another person having right to sign for the company.

Note The provisions of Article 203 of this Act and its Note shall apply to commercial companies and other juridical persons as well.

Article 207 In cases where the taxpayer designates an address as his place of work or abode, or as a place where the tax notices are to be served, as well as in other cases where the tax papers are served at a certain address assumed to be the place of work or residence of the taxpayer and some evidence or proof can be found in the relevant file indicating that the taxpayer was aware of this fact without objecting to the latter address, the serving of tax papers to such addresses shall be legal and correct, as long as another address is not declared by the taxpayer as his place of work or residence.

Article 208 Should the taxpayer’s address be not available, the tax notice shall be published once in a mass circulation paper of the jurisdiction of the local tax affairs office. If there is no paper in the said area, the publication shall be made in a mass circulation paper of another area nearest to the jurisdiction of the relevant tax affairs office, or in a mass circulation paper of the capital. Such publication shall be deemed as serving on the taxpayer.

Note (1) Besides the related matter, the place of serving, the time limit set forth and legal duty of the taxpayer shall be mentioned in the text of the served tax notices.

Note (2) With regard to the taxpayers of real estates whose addresses are not known, as envisaged under the Article 207 hereof, the tax notice shall be served at the premises of the real estate the tax of which is claimed, in conformity with the procedure specified in the Note to the Article 203 of the present Act.

Article 209 Except for instances set forth under the present Act, the provisions of the Civil Procedure Law about the serving of process shall apply with regard to the serving of tax papers.

Article 210 In case the taxpayer fails to pay his finalized tax within 10 days from the notification of the final notice, the tax affairs office shall notify him by a writ of execution to pay, or arrange for the payment of, all his tax dues to the said office within one month from the date of notification.

Note (1) The type and amount of the tax, documents related to the final assessment of the liability, the relevant tax year, the amounts already paid and the applicable fine shall be specified in the writ of execution.

Note (2) That part of the tax that is accepted by the taxpayer and stated in the submitted tax return or balance sheet shall be considered as a final tax and will be collectible through the execution procedure.

Article 211 If the taxpayer fails, after notification of the writ of execution, to pay the total amount of the tax claimed, or to arrange with the tax affairs office for the payment thereof, within the prescribed time limit, his movable and immovable properties and receivables shall be seized up to his liability, including the principal tax and applicable fines, plus 10% of the liability. The writ of seizure and the order for the implementation thereof shall be issued by the execution section of the tax affairs office.

Article 212 The seizure of the following properties is prohibited: (1) two-thirds of the salary of salary receivers and threefourths of retirement pension and survivors pension. (2) clothing, articles and objects needed for urgent requirements of the taxpayer and his dependants, as well as the available provisions and alimony of the persons entitled to receive the same from the taxpayer; (3) agricultural and Industrial equipment and tools and business facilities necessary for securing minimum needs of living for the taxpayer; and (4) place of habitation to a normal extent.

Note (1) If the value of the property opted for seizure exceeds the taxpayer’s liability and it cannot be divided, the property shall entirely be seized and sold and the balance shall be refunded, unless the taxpayer presents another unclaimed property equivalent to the said liability.

Note (2) In case the taxpayer is one of the spouses living in the same house, those items of furniture that are habitually used by women shall be considered to belong to the wife and the rest to the husband, unless the opposite is found out.

Note (3) The seizure of producing units, whether agricultural or industrial, must not result in stoppage of such units in the course of execution operations.

Article 213 The valuation of seized properties shall be made by the appraiser of tax affairs office. However, the taxpayer may request that the properties be valued by an official appraiser, in which case he should deposit the appraisal fee according to the regulations related to the fees of official experts of the justice Administration.

Article 214 All necessary measures in connection with the advertising of auctions, tenders and sale of seized properties, whether movable or immovable, shall be undertaken by the officer in charge of execution proceedings in the respective tax affairs office. As for the sale of immovable properties, if the prescribed formalities are brought about and a purchaser is determined, but the owner refrains from turning up for signing the transfer deed, the execution officer of the tax affairs office shall apply, by virtue of relevant documents, to the local registration department for the transfer of the property to the purchaser and the said department shall comply with this application.

Article 215 As regards the seized immovable properties, if no purchaser turns up after two times advertising (the second of which should be published without determining a minimum price), the State Organization of Tax Affairs may transfer to itself, on basis of the valuation to be made by an official expert of the justice Administration, a part of the seized property equivalent to the total liability of the taxpayer plus the applicable charges, and offset the value thereof against the taxpayer’s dues.

Note (1) If before the property is transferred to the State Organization of Tax Affairs or other parties, the taxpayer volunteers to pay his dues, the State Organization of Tax Affairs shall lift the seizure of the said real property after receiving the taxpayer’s dues plus 10% thereof and applicable charges.

Note (2) If the property is transferred to the State Organization of Tax Affairs and the Organization is prepared to sell it, then the taxpayer, in case of requesting, shall have priority in purchasing thereof, all conditions being equal.

Article 216 The forum for examination of the complaints arising out of the execution measures taken in connection with the claims of the government against other persons, whether real or juridical, which claims are callable and collectible on basis of tax execution regulations, shall be the Board of Settlement of Tax Disputes. Such complaints shall be examined and relevant decisions shall be taken immediately and out of turn, and the judgments rendered shall be final and enforceable.

Note (1) As for direct taxes, if the complaint is to the effect that the execution procedure for collection of the tax has been effected before finalization of the tax, and the Board of Settlement of Tax Disputes finds the complaint justified, it shall - in addition to annulling the execution notice - issue a writ for examination of the case and for taking necessary measures, or it shall examine and render a judgment on the taxable income of the taxpayer, whichever be applicable. The verdict of the Board shall be final.

Note (2) In respect of indirect taxes, where the executive complaint is to the effect that the claiming of tax is not law ful, the forum for examination of this complaint shall also be the Board of Settlement of Tax Disputes and the decision taken by the Board in this regard shall be final and enforceable. This Note shall not apply to the fines related to the smuggling of goods constituting sources of the government’s revenue, or to the price of the smuggled goods that are vanished, nor shall it apply to that category of indirect taxes that are to be settled, according to relevant special regulations, by specific fora.

Article 217 The Ministry of Economic Affairs and Finance is authorized to remit one percent of taxes and fines collected under the present Act (except for the income tax of government companies) to a special account held by the Treasury and spend it for the purpose of education and training of the personnel in taxation and auditing fields, and also for encouraging the employees and other persons who have exerted, or will exert, effective endeavors for collection of taxes. The funds paid as collection bonus under the present Article shall be exempt from taxation and also from all contrary regulations. The Ministry of Economic Affairs and Finance shall submit, every six months, a report on the volume of taxes collected and its distribution between different layers and levels of income to the Committee of Economic Affairs and Finance of the Islamic Consultative Assembly*.

Article 218 The by-law related to the section in charge of tax collection shall be approved by the Ministries of Economic Affairs and Finance and justice and shall be enforced by the Ministry of Economic Affairs and Finance.

Title E - Tax Assessment Organization and Tax For a

Article 219 The identification and assessment of taxable income and claiming and collection of taxes subject to the present Act shall be the responsibility of the State Organization of Tax Affairs that has been established by virtue of the paragraph "a" of the Article 59 of the Law of the Third Economic, Social and Cultural Development Plan of the Islamic Republic of Iran. The manner of discharging the duties, and using the competence and powers, vested with each of the tax officers and tax affairs office, and also the procedure of execution of the rules of the present Act, will be specified in the regulations to be proposed by the State Organization of Tax Affairs and approved by the Minister of Economic Affairs and Finance within a maximum term of six months after the approval of this Act.

Note, The State Organization of Tax Affairs may employ the previous procedures, execution arrangements and job titles, as executive provisions, before the approval of the regulations envisaged in this article

Article 220 The following phrase logical amendments should take place in the present Act: The phrase "State Organization of Tax Affairs" should substitute for the "Ministry of Economic Affairs and Finance" in the cases mentioned below: Articles 26, 29, 39, 40, 41, 57, 80 and 114. Article 154 and the Note 2 thereof. Articles 158, 159 and its Note, 160, 163, 164, 166, 169, 176, 186, and 191. Note 2 of the Article 203, Article 215 and the Notes 1 and 2 thereof and the Note of the Article 230. 2. In following cases the phrase "tax affairs office" should substitute for the phrases "assessment official", "assessment officials", "tax assessor", "chief assessor", "tax district", "tax assessment office", "assessment office", "assessment office of the tax district" and "department of economic affairs and finance": 1. Articles 26, 27, 29, 31, 34, 35 and Notes 2 and 3 of the Article 38. Article 39 and its Note. Articles 72 and 80. Notes 1 and 2 of the Article 87. Articles 88 and 102. Note 5 of the Article 109. Articles 113, 114, 117, and 126. Article 154 and Note 2 thereof. Articles 156, 161, 162, 164, 170, 179, 183, 184 and 185. Article 186 and its Note. Articles 188, 208, 210, 211, 213, 214, 227 and 229. Article 230 and its Note. Articles 232, 233 and 249.

Articles 221 Deleted

Articles 222 Deleted

Articles 223 Deleted

Articles 224 Deleted.

Articles 225 Deleted

Article 226 If the taxpayers who are required to file tax return, balance sheet and profit and loss account, fail to submit their tax return within the prescribed time limit, such failure shall not prevent the review of their balance sheet and profit and loss account, that are submitted before the deadline, within the time limit stipulated under the article 156 of this Act. Otherwise, the income mentioned under the balance sheet or profit and loss account shall become conclusive.

Note In case of occurrence of any kind of miscalculation in the tax return, balance sheet or profit and loss account submitted by a taxpayer, he shall be authorized, after producing necessary evidence to that effect, to adopt measures for removing the error and submitting the corrected tax return, balance sheet or profit and loss account, as the case may be, within one month from the expiry of the time limit set forth for filing of the tax return. The date of submission of the tax return shall, at any event, be deemed to be the date when the first tax return is filed.

Article 227 If after the acceptance of the taxpayer’s tax return, balance sheet and profit and loss account, as the case may be, or after the ex officio assessment of the tax and issuing assessment notice, it becomes proved that the taxpayer had certain activities which he had hidden the income derived there from, or the tax affairs office was not aware of it when issuing the assessment notice, then the applicable tax shall be determined by taking into calculation the income derived from such activities, and the balance of the tax shall be claimed by due regard to the deadline stipulated under the Article 157 of the present Act.

Article 228 In cases where the tax return or balance sheet and profit and loss account of the taxpayer are rejected, or the said documents are not submitted within the legal time limit, the taxpayer’s tax shall be assessed and claimed according to the provisions of the present Act.

Article 229 Tax affairs office may, for examination of the tax return or assessment of any income of the taxpayer, refer to all relevant books of accounts, records and documents and investigate them, and the taxpayer is obligated to present and submit the same. Otherwise, such items shall not be citable in his favor with regard to that year’s taxation, unless it becomes evident, before the final assessment of his income, that they could not be produced in previous stages for the reasons beyond the taxpayer’s control. The rule of the present Article shall not prevent the forums of settlement of dispute from referring to the papers and documents produced by the taxpayer for assessing his actual income.

Article 230 In cases where the documents and records indicating the earning of certain income are held by third parties, other than those referred to under the Article 231 hereof, such third parties shall be required to produce, when applied and asked by the tax affairs office, the books of accounts, as well as the original or copy of relevant documents and any type of information pertinent to the taxpayer’s income or specifications. Otherwise, and if some losses are sustained by the government as a result of such third parties’ failure, they shall be convicted to indemnification of the government’s losses. The forum for verifying the third parties’ failure and determining the losses sustained by the government, will be the competent judicial authorities, who shall examine the case out of turn when applied by the office of the Tax Disciplinary Prosecutor.

Note In cases where the third parties refrain from producing documents and papers demanded by the tax affairs office, the State Organization of Tax Affairs may require them, through the office of the Prosecutor General, to submit such papers and documents. The judicial prosecution of the case shall not prevent the tax affairs office from taking measures.

Article 231 Where the tax affairs offices ask, in writing, the ministries, government institutions, state companies, foundations of the Islamic Revolution, municipalities and other non-government public foundations and institutions to produce necessary information and documents in respect of the taxpayer’s activities and transactions, such organizations shall be required to put certified copies of related docu ments and any necessary information at their disposal, unless the official in charge of the issue declares that such disclosure shall harm the interest of the country. In the latter case the disclosure can be refrained from when agreed by the respective responsible minister and confirmed by the Minister of Economic Affairs and Finance. Otherwise, the offence of the relevant official shall be examined by competent judicial fora out of turn, when declared by the office of the Tax Disciplinary Prosecutor, and he shall be convicted to an appropriate punishment as the case may require. As regards the cases where relevant information and documents are held by judicial authorities and they consider the producing thereof to be unadvisable, the provision of such information shall depend on the agreement of the Prosecutor General.

Note in respect of banks and non-bank credit institutions, the State Organization of Tax Affairs will demand the documents and information concerning the taxpayer’s income through the Minister of Economic Affairs and Finance, in which case the banks and non-bank credit institutions shall be required to act in accordance with the view of the Minister of Economic Affairs and Finance.

Article 232 The tax affairs office and other tax authorities must consider as confidential, the information they obtain in the course of reviewing the taxpayer’s tax affairs, and should refrain from disclosing it, except before the respective authorities and to the extent it is needed for assessment of taxes and income. In case of disclosure, they shall be treated in conformity with the Islamic Criminal Code.

Article 233 If the tax affairs office comes across, in the course of its investigations, tax offences subject to the Article 201 hereof that are committed by the taxpayers, it must report the case to the Tax Disciplinary Prosecutor for prosecution.

Article 234 Deleted.

Article 235 The tax affairs office shall draw up, in case of taxpayers who have paid their final tax dues, a tax clearance and deliver it to the taxpayer not later than five days from the date of receiving the taxpayer’s request to that effect.

Article 236 Deleted.

Article 237 The tax assessment notice should be drawn on a correct basis and must be substantiated by sufficient evidence and information, in a manner to reflect manifestly all related activities and incomes derived therefrom, so that to be clear for the taxpayer. Those signing the assessment notice must record their full name and position in a readable manner thereon, and they shall be responsible for the contents of the assessment notice and for their own opinion in every respect. In case of inquiry by the taxpayer about the manner of assessment, the aforesaid persons shall be required to announce details of the report constituting the basis of tax assessment and have to furnish any explanations the taxpayer may request in this respect.

Article 238 Where the tax assessment notice is issued and served on the taxpayer, he may, in case of being unsatisfied therewith, apply personally or through a full-authorized agent to the tax affairs office within thirty days from the date of service and ask, in writing, for reexamination by providing evidence, documents and records. The relevant responsible officer shall review the case, after recording it in the respective register, within a time limit not exceeding thirty days from the date of the taxpayer’s application. In case of considering the supplied evidence, documents and records enough for rejection of the assessment notice, the responsible officer shall reject it by recording the matter and signing it on the back of the assessment sheet. If the furnished evidence, documents and records justify, in his view, the adjustment of the income, and this view is shared by the taxpayer, the relevant responsible officer shall reflect the matter on the back of the assessment notice, which shall be signed by him and the taxpayer. But If the supplied evidence and documents would not justify, in the view of the responsible officer, the rejection of the assessment notice or adjustment of the income, he shall reflect the matter, together with justification, on the back of the assessment notice, and shall refer the case to the Board of Settlement of Tax Disputes for examination.

Article 239 If within thirty days from the serving of the assessment notice the taxpayer declares, in writing, his acceptance with regard to it, or pays the tax claimed on basis of the assessment notice, or adopts arrangements for the payment of the same, or settles his dispute with the tax affairs office as described under the Article 238 hereof, then the case shall be deemed as closed with regard to the amount of taxable income. Should no written objection is lodged by the taxpayer within thirty days, or if he would not apply to the relevant tax affairs office within the time limit prescribed in the said article, the income determined under the assessment notice shall become final.

Note In cases where the assessment notice is served according to the provisions of the Note to the Article 203 and Article 208 of this Act, and no measures are taken by the taxpayer in accordance with the provisions of the present Article, he shall be deemed as objecting to the assessment notice. In this case and also when the taxpayer files a written protest with regard to the assessment notice within thirty days from notification thereof, the file of the case shall be referred to the Board of Settlement of Tax Disputes for examination.

Article 240 When the case is tried before the Board of Settlement of Tax Dispute, the representative of the tax affairs office must attend the session of the Board for producing sufficient evidence for justification of the contents of the assessment notice and for giving necessary explanations.

Article 241 Deleted.

Article 242 In cases where extra taxes are collected as a result of miscalculation, and also where a tax is refundable under the provisions of the present Act, the tax affairs office shall be required to pay the refundable amount, within one month, to the taxpayer out of the current collections.

Note The extra amounts received under any title from taxpayers in connection with the taxes set forth in this Act shall be subject to compensation at the rate of 1.5% per month as from the date of receiving the same till the date of refunding. It shall be paid to the taxpayer out of the current collections. The rule of this Note shall also apply to withholding taxes and on account payments in case of exceeding the applicable taxes and if such extra payments are not refunded to taxpayers within three months from the date of receiving the taxpayer’s request to that effect. The compensation will apply from the end of that period.

Article 243 In case the taxpayer applies for the refund, but the tax affairs office would consider it unjustified, the taxpayer may apply, within thirty days from the notification of the relevant office’s decision, to the Board of Settlement of Tax Disputes for reviewing the case. The decision of the Board of Settlement of Tax Disputes in such cases shall be conclusive and inappealable. If the decision of the Board is for the refund of extra tax, the relevant office shall be required to carry out it in accordance with the last part of the Article 242 of the present Act.

Article 244 The forum for reviewing all tax disputes shall be the Board of Settlement of Tax Disputes, except in cases where other fora are provided under the present Act. Every Board of Settlement of Tax Disputes shall consist of three persons as follows: (1) one representative from the State Organization of Tax Affairs; (2) one judge, whether active or retired. If qualified retired judges could not be found in centers of provinces and other cities, the head of the judiciary will introduce an active judge as the member of the Board, when the State Organization of Tax Affairs would request that; and (3) a representative from the Chamber of Commerce, Industries and Mines, Chamber of Cooperatives, Society of Official Accountants, professional associations, guild organizations or Islamic city councils, whichever the taxpayer would choose. In cases where the assessment notice is notified through substituted service, or the taxpayer fails to declare his choice at the time of filing his protest within the legal time limit, the State Organization of Tax Affairs shall select one of the said representatives by due regard to the type of the taxpayer’s activity or the kind of the tax under review.

Note (1) The quorum for the sessions of the Board of Settlement of Tax Disputes shall consist of three members and its verdict shall be conclusive and enforceable when rendered by the majority. However, the opinion of the minority should also be mentioned in the text of the verdict.

Note (2) The State Organization of Tax Affairs shall be responsible for administration of the affairs of the Boards of Settlement of Tax Disputes and for convening of their sessions. The remuneration of the members of the Boards of Settlement of Tax Disputes will be payable out of the funds to be forecast for this purpose in the said organization’s budget and on basis of the regulations that will be proposed by the State Organization of Tax Affairs and approved by the Minister of Economic Affairs and Finance.

Article 245 The board members who are representative of the State Organization of Tax Affairs shall be selected from among the said organization’s employees with at least ten years service experience, from which not less than six years should be related to taxation career, and they must be knowledgeable and acquainted with tax affairs.

Article 246 For the purpose of participation of the taxpayer or his representative and possibility of dispatching a representative by the tax affairs office, the time of hearing of the Board of Settlement of Tax Disputes shall be notified in case of each file to them. The interval between the date of notifi cation and the day of convention of the hearing session shall not be less than ten days, except when otherwise requested by the taxpayer and agreed by the relevant office. Note The absence of the taxpayer or his representative or the representative of the tax affairs office shall not prevent the board from examining the case and rendering its verdict.

Article 247 Deleted

Article 248 The verdict of the Board of Settlement of Tax Disputes must include justified and substantiated view concerning the objection of the taxpayer, and in case of deciding upon the adjustment of the taxable income, the reasons and grounds thereof should be specified by the Board in the text of the verdict.

Article 249 The Boards of Settlement of Tax Disputes are required to mention the basis of tax calculation in the text of their verdict and in case of erroneous calculation, should examine it and correct the verdict, when applied by the taxpayer or the tax affairs office.

Article 250 In cases where the Board of Settlement of Tax Disputes rejects the tax assessment notice or adjusts the assessment made by the tax affairs office, it should send a copy of its verdict and the transcript of the assessment notice to the Tax Disciplinary Prosecutor for examination, so that the offending person be prosecuted, if commitment of an offence is ascertained.

Article 251 The taxpayer or the tax affairs office can file a complaint with the Supreme Tax Council, within one month from the date of serving of the final verdict of the Board of Settlement of Tax Disputes, and apply by providing sufficient evidence for reversal of the verdict and reconsideration of the case for the reason of nonobservance of positive laws and regulations or because of defect in examination. Article 251 bis In case of final taxes subject to the present Act and indirect taxes that are not capable of being reviewed by any other forum, if the taxpayer submits a complaint to the effect that the tax is unfair and provides sufficient documents and evidence to that effect and applies for reconsideration of the case, the Minister of Economic Affairs and Finance may refer the file of the case to a board composed of three persons, whom he shall nominate personally. The verdict of the board shall be conclusive and enforceable when rendered by the majority. The rule of the present Article shall also apply to the turnovers of the year 1368’’` and subsequent years up to the date of approval of this amendment.

Article 253 The term of membership of the Supreme Tax Council’s members shall be three years from the date of appointment. They shall not be removable from the membership during the said period of three years, unless upon their own request or by virtue of the final verdict of the special administrative tribunal referred to under the Article 267 of this Act. Reappointment of the members after the expiry of the said three years will be allowed. The president of the Supreme Tax Council will be nominated by the head of the State Organization of Tax Affairs from among the members of the Council who are employees of the Ministry of Economic Affairs and Finance and will be appointed by an order of the Minister of Economic Affairs and Finance.

Article 254 The Supreme Tax Council shall consist of eight chambers, and each chamber of three members. The head and members of chambers will be appointed by the president of the Supreme Tax Council.

Article 255 The Supreme Tax Council shall consist of eight chambers, and each chamber of three members. The head and members of chambers will be appointed by the president of the Supreme Tax Council.
(1) preparation of regulations and circular letters related to the enforcement of this Act when it is instructed by the Minister of Economic Affairs and Finance or by the head of the State Organization of Tax Affairs, or if the Supreme Tax Council would consider it necessary to prepare and propose the same to the head of the State Organization of Tax Affairs;
(2) conducting studies with the aim of suggesting and rendering views on the manner of implementation of tax laws and regulations, and also for submitting proposals to the Minister of Economic Affairs and Finance or the head of the State Organization of Tax Affairs for amendment and alteration of tax laws and regulations or removing some of them;
(3) reflecting on subjects and issues, which the Minister of Economic Affairs and Finance or the head of the State Organization of Tax Affairs may refer, in case of necessity, to the Supreme Tax Council for consultation and seeking its opinion; and
(4) review of final verdicts of the Boards of Settlement of Tax Disputes that are complained of by the taxpayer or the tax affairs office for nonobservance of positive laws and regulations or defect of examination.

Article 256 If a complaint is filed within the prescribed time limit, either by the taxpayer or the tax affairs office, against the final verdict of the Board of Settlement of Tax Disputes, by which a claim is raised alleging, clearly or implicitly, the breach of positive laws and regulations or defect of examination, while evidence is produced or documents and records are presented to that effect, then the president of Supreme Tax Council shall refer the complaint to one of the relevant chambers for review.
The relevant chamber shall examine the case from the standpoint of observance of procedures and completeness of legal
examination and conformity of the case with positive laws and regulations exclusively, without dealing with the substance of the issue, and shall render an appropriate verdict, substantiated by legal evidence and considerations, with effect either to the reversal of the verdict of the Board of Settlement of Tax Disputes, or rejection of the submitted complaint. The verdict of the chamber shall be valid when issued by the majority, while the opinion of the minority should also be mentioned therein.

Article 257 Whenever the chamber reverses the verdict subject to complaint, the file of the case shall be referred to another Board of Settlement of Tax Disputes for reconsideration. If there is only one Board of Settlement of Tax Disputes in the relevant place, the case shall be referred to the Board of Settlement of Tax Disputes of nearest city located in the same province as the relevant place. The reviewing forum shall reexamine the case of tax dispute in conformity with the chapter III of the present title of this Act, and shall issue its verdict with due regard to the opinion of the chamber of the Supreme Tax Council. The verdict rendered in such manner shall be conclusive and enforceable.
The rule of this Article shall also apply in cases where the verdict of the Board of Settlement of Tax Disputes is reversed by the Court of Administrative Justice.
Note Whenever the verdict of the Board of Settlement of Tax Disputes is reversed, the Supreme Tax Council shall send a copy of the Board’s verdict to the Tax Disciplinary Prosecutor for examination, so that the case be prosecuted if an offence is ascertained.

Note Whenever the verdict of the Board of Settlement of Tax Disputes is reversed, the Supreme Tax Council shall send a copy of the Board’s verdict to the Tax Disciplinary Prosecutor for examination, so that the case be prosecuted if an offence is ascertained.

Article 258 Where different opinions are adopted by chambers of the Supreme Tax Council with regard to similar cases, the Minister of Economic Affairs and Finance, or the head of the State Organization of Tax Affairs, or the president of the Supreme Tax Council, shall refer the case to the Plenary Board of the Supreme Tax Council composed of the president and heads of chambers of the Council, or a member of the Council at the discretion of the president where the head of a chamber is absent. The Plenary Board shall examine the disputed subject and shall take a decision by rendering its verdict. In such cases, the verdict of the Plenary Board, if issued by the majority of two thirds of all its members, shall be conclusive and must be followed in similar cases by the chambers of the Supreme Tax Council and Boards of Settlement of Tax Disputes.

Article 259 If the complaint against the verdict of the Board of Settlement of Tax Disputes is filed by the taxpayer, and he deposits cash or bank guarantee equal to the amount of the tax determined under the verdict, or introduces a real security or a creditable guarantor, whose creditability is accepted by the tax affairs office, then the enforcement of the verdict shall be suspended till the Supreme Tax Council delivers its opinion.

Article 261 The High Tax Disciplinary Board shall consist of three full members and two alternate members who will be nominated by the head of the State Organization of Tax Affairs from among the senior officials of the Ministry of Economic Affairs and Finance, who are knowledgeable and informed in the filed of tax affairs and have a service record of 16 years, of which not less than six years should have been spent in tax positions, and will be appointed to the duty in question for three years by an order of the Minister of Economic Affairs and Finance. The position of such persons shall not be changeable during that period, unless upon their own request or by virtue of the final verdict of the special administrative tribunal envisaged under the Article 267 of this Act. Reappointment of them after the expiry of the said three years shall be allowed.
The head of the High Tax Disciplinary Board will be nominated by the head of the State Organization of Tax Affairs from among the full members of the Board and will be appointed by an order of the Minister of Economic Affairs and Finance.

Note The employees who have gone through the positions envisaged under the Article 220 of this Act, and have served, as director general in provinces other than the province of Tehran, shall have priority for being nominated to the said duty.

Article 262 The tasks and authorities of the High Tax Disciplinary Board shall be as follows:
(a) investigating, when asked by the office of the Tax Disciplinary Prosecutor, the administrative offences related to tax affairs, which are committed by any tax officer or representative of the State Organization of Tax Affairs in the Board of Settlement of Tax Disputes and members of the 3-Man Board described under the paragraph (3) of the Article 97 of this Act, and other officials having responsibility under this Act for collection of taxes, and also the persons who perform the tasks of the said officials while maintaining their principal position. The prosecution and examination of cases under investigation by the office of the former Tax Disciplinary Prosecutor, or by the ex-High Tax Disciplinary Board, shall be carried out by the authorities specified in this chapter;
(b) renouncing, at the request of the Tax Disciplinary Prosecutor, the competence of the persons occupying aforesaid positions for continuing tax services, because of moral problems, behaviors contrary to the prestige and status of tax officials, bad reputation, negligence and carelessness in discharging the relevant duties; and
(c) examining the protests of the officials, whose competence is not confirmed by the Tax Disciplinary Prosecutor.
The opinion of the Board in such cases shall be valid for respective officials.

Article 263 The Tax Disciplinary Prosecutor will be nominated by the head of the State Organization of Tax Affairs from among the senior officials of the Ministry of Economic Affairs and Finance, who have a minimum service record of ten years from which six years should have been spent in tax jobs, and will be appointed to that position by an order of the Minister of Economic Affairs and Finance

Note The Tax Disciplinary Prosecutor may have sufficient number of assistants and may assign to them a part of his authorities.

Article 264 The tasks of the Tax Disciplinary Prosecutor shall be as follows: (a) investigating, detecting and prosecuting the offences and faults of tax officers and representatives of the State Organization of Tax Affairs in the Boards of Settlement of Tax Disputes, members of the 3-Man Board envisaged under the paragraph (3) of the Article 97 of this Act, other officials dealing with the duty of tax collection according to the present Act and the persons performing the tasks of the said officials while maintaining their principal positions;
(b) investigating about the moral characters, behavior and actions of the said persons;
(c) advising on promotion of tax officers and representatives of the State Organization of Tax Affairs in the Boards of Settlement of Tax Disputes; and (d) bringing lawsuits against the taxpayers and tax officials in cases envisaged under the present Act.

Article 265 The causes of commencement of examination and investigation shall be as follows:
(a) the complaint of interested persons with regard to the nonobservance of the provisions of this Act;
(b) the report received from the official authorities;
(c) cases referred by the Minister of Economic Affairs and Finance or the head of the State Organization of Tax Affairs, or by the High Tax Disciplinary Board; and
(d) observations and information of the Tax Disciplinary Prosecutor.

Note The Tax Disciplinary Prosecutor shall investigate the cases envisaged under the present Article and shall, as the case may warrant, file them, issue a nolle prosequi, or draw up a bill of indictment and submit it to the High Tax Disciplinary Board. The instance should also be reported to the High Tax Disciplinary Board where a nolle prosequi is issued. The Board shall directly examine the case if it would consider the nolle prosequi not in agreement with the facts of the issue.

Article 266 The forum for investigating the offences of the persons referred to in the Article 262 of the present Act, shall consist of two members of the High Tax Disciplinary Board, other than the head of the Board, and a member of the Supreme Tax Council to be introduced by the president of the Council. The forum shall investigate the case referred to it in conformity with the provisions of this Act, the Law concerning the Administrative Offences and other positive regulations, and shall render a verdict of acquittal or conviction. The verdict shall be appealable by the prosecuted official or the office of the Tax Disciplinary Prosecutor within ten days from the serving thereof. The forum for reconsideration of the case shall consist of three members; the head of the High Tax Disciplinary Board, the president of the Supreme Tax Council and a member of the High Tax Disciplinary Board. The latter member shall be nominated by the head of the Board and must have not participated in issuing the verdict of the first instance stage. The verdict of the appellate forum shall be conclusive and enforceable.

Note (1) If a member of the High Tax Disciplinary Board has the record of rendering a verdict or expressing any views on the case under consideration, whether in first or appellate instance, the Minister of Economic Affairs and Finance shall appoint another person to that end.

Note (2) Whenever the verdict of the appellate forum is repealed by the Court of Administrative justice, or the case is declared to be revisable, the file of the case shall be referred,solely for the grounds cited by the said court, to a board consisting of three persons selected by the Minister of Economic Affairs and Finance, of whom one member will be the head of the State Organization of Tax Affairs. The verdict of the Board shall be conclusive and enforceable.

Article 267 The disciplinary offences of the members of the Supreme Tax Council, or of the members of the High Tax Disciplinary Board, shall be investigated, when instructed by the Minister of Economic Affairs and Finance, by an special administrative tribunal consisting of one of the heads of the chambers of the Supreme Court introduced by the Chief Justice of the said court, head of the Accounts Tribunal and the head of the State Organization of Tax Affairs. The tribunal shall examine the case in conformity with the Law on Investigation of Administrative Offences and other relevant regulations, and shall rule on acquittal or conviction. The verdict of the tribunal shall be conclusive and enforceable.

Article 268 Whenever the notaries public are obligated under the tax laws and regulations to perform certain tasks in connection with the transactions concluded through them, any offences committed by them in connection with the performance of such duties shall be prosecuted by the Tax Disciplinary Prosecutor. Trial and punishment of the offending notaries public shall be effected by the competent forum envisaged under the Notaries Public Act. However, the Tax Disciplinary prosecutor may, apart from submitting a bill of indictment, assign the representative of the tax affairs office for providing explanations to the said forum.

Article 269 The offences of the judges of the Boards of Settlement of Tax Disputes related to performance of the duties vested in the said board under the tax laws and regulations, shall be prosecuted by the office of the Disciplinary Prosecutor of judges, after being declared by the Tax Disciplinary Prosecutor. As regards the retired judges and the representatives referred to under the paragraph (3) of the Article 244 of this Act, the investigation of their offences shall be effected, after being announced by the Tax Disciplinary Prosecutor, by the courts of justice, and they shall be convicted to appropriate punishments.

Article 270 The offences of tax officers and representatives of the State Organization of Tax Affairs in the Boards of Settlement of Tax Disputes in the following cases shall be subject to the punishments described below:
(1) If after the assessment of the tax and its becoming inappealable, it becomes evident that the tax officers and representatives of the State Organization of Tax Affairs in the Boards of Settlement of Tax Disputes have assessed, intentionally or negligently, the income of the taxpayer below or above the actual amounts, without paying attention to the records and documents of the taxpayer, and also without performing sufficient investigation, then the offending persons shall be convicted to the administrative punishment of dismissal from government services for a period not less than three months and not more than five years, in addition to indemnification of the losses incurred, the amount of which shall be determined by the Supreme Tax Council;
(2) In cases where the taxes of taxpayers become subject to the statute of limitation or uncollectible as a result of the negligence or carelessness of tax officers, except in case of the tax returns that are not to be examined necessarily by virtue of the Article 158 hereof, the failing officer shall be convicted, according to the verdict of the High Tax Disciplinary Board, to dismissal from tax services, and also to an appropriate punishment stipulated under the Law on Investigation of Administrative Offences.
Meanwhile, the offending officer shall have civil liability for the losses sustained by the government, to the extent to be assessed by the Supreme Tax Council. The Tax Disciplinary Prosecutor shall raise a claim for indemnification of losses by virtue of the same liability in the civil courts of justice. In case of having ill intent, the accused person shall be subject to criminal prosecution by the Tax Disciplinary Prosecutor.
The tax officers who reopen the closed and adjudicated tax cases shall be convicted, by the verdict of High Tax Disciplinary Board, to dismissal from government services from one to four years. If they give false reports and thus cause, intentionally, the faultless taxpayers to be prosecuted, shall be convicted, by the judgment of the courts of justice, to imprisonment from six months to two years. The courts shall examine such cases out of turn.
The same rule shall apply where in cases referred to in the Articles 156, 227 and 239 hereof and after the assessment notice is issued at any stage, a tax officer claims a tax in respect of other activities of the taxpayer, whether of the same type or otherwise, without obtaining substantiating documents, or after the statute of limitation, as envisaged under the Articles 156 and 157 of this Act, is applied.

Note The procedure for investigation of relevant offences and applicable punishments shall be subject to the Law concerning the Investigation of Administrative Offences, except in respect of cases for which special regulations are envisaged under the present Act.

Article 271 As regards the rejection of the books of accounts and documents and records of the taxpayer, if the 3Man Board envisaged under the paragraph (3) of the Article 97 hereof would refuse, during a tax year, more than one fifth of the views expressed by a tax affairs office (taking into account the relevant extra time limit), the respective tax officers shall be subject to dismissal from tax assessment duty for one year, and in case of repetition for ever.

Article 272 The Audit Organization of the Islamic Republic of Iran and official accountants and audit firms that are members of the Official Accountants Society, in case of undertaking the task of legal audit and inspection or auditing of persons*, shall be required, when asked by those persons, to draw up a tax audit report in conformity with the sample to be prepared by the State Organization of Tax Affairs, and to put it at the disposal of the taxpayer for submitting the same to the relevant tax affairs office. The report must contain the following data:
(a) An opinion rendered on whether account records and documents were sufficient for the purpose of auditing in accordance with the provisions of this Act and relevant regulations and by observance of principles, criteria and standards of accountancy.
(b) The taxable income determined on the basis of the provisions of this Act and respective regulations.
(c) An opinion delivered regarding at source taxes, which the taxpayer has to withhold and forward to the tax affairs office according to the law. (d) Other items prescribed by the sample of audit report that will be drawn up by the State Organization of Tax Affairs.

Note 1 The tax affairs office will accept the report of tax audit without investigation and will issue the assessment notice according to the regulations. Acceptance of the report of tax audit will depend on the condition that the taxpayer would attach to it the financial audit report on financial statements that is drawn up by the same official accountant or audit firm in accordance with the accountancy standards and submit the same, simultaneously with the tax return or within a maximum time limit of three months from the expiry of the deadline for filing of tax return, to the respective tax affairs office.

Note 2 The State Organization of Tax Affairs can assign the task of auditing the financial statements and drawing up of tax report of real and juridical persons to official accountants or audit firms. In that case, the remuneration will be born by the State Organization of Tax Affairs in accordance with the relevant regulations.

Article 273 This Act shall become enforceable as from the beginning of the year 1381’’` and all juridical persons whose fiscal year has begun from the first day of Farvardin" 1380’’` onwards, shall also become subject to it in respect of examination procedure and tax rate. As from the enforcement date of this Act, all the laws and regulations inconsistent therewith shall become null and void, except for tax regulations of the Law of the Third Economic, Social and Cultural Development Plan of the Islamic Republic of Iran, during the term of the same plan, and the Article 13 of the Law of 06/07/1372’’` concerning the Manner of Administration of Free Commercial-Industrial Regions and its commentary* of Ol/21/1374
This rule shall also apply to the inconsistent laws and regulations that the application of public laws and regulations to them requires explicit mentioning or explicating their names.
This law comprising 133 articles was approved by the Islamic Consultative Assembly’’` in the course of its open session of Saturday the twenty seventh of Bahman ’’` 1380*, and was confirmed by the Council of Guardians on 11/27/1380’. Mahdi Carrubi , Speaker of the Islamic Consultative Assembly*
DEFINITIONS and ... In the recent amendment of the Direct Taxes Act short dotted lines (several dotes) are used in two cases (see pages 84 and 116, supra). This new type of punctuation has been employed to convey a meaning or concept near to the English phrase: "and the like" or "and the similar things". (For legal texts this innovation might seem slightly odd, even for Iranian lawyers).
Bahman Name of the eleventh month of Iranian solar year. See Iranian Calendar, infra.
Bonus See Bonus and New Year Bonus, infra.
Bonus and New Year Bonus The term bonus as used in the Direct Taxes Act, means a premium or extra remuneration paid to civil servants and other employees in consideration of remarkable or extra offices performed by them. The New Year Bonus, on the other hand, is an extra payment to employees on account of arrival of the Iranian New Year only and is rooted in an Iranian old tradition.
Capital recipient company A new terminology has been developed in Iran in respect of the persons (and especially entities) that invest in other companies and the entities receiving such investments. The "investor entity" could be a suitable translation for investing companies. But, since there is no such word as "investee" in English, the phrase "investment recipient" has been chosen to describe the second type of entities.
Commentary The term "commentary" in the page 155 refers to the interpretation made by the parliament with respect to the Law of 06/07/1372 concerning the Manner of Administration of Free Zones.
Contract (of endowment, etc.) Under the Iranian law the legal act of endowing a property is considered to be a "contract", the first party of which is the owner of the property who endows it and the second party consists of the beneficiaries (Civil Code, Article 56). The same is true in respect of will (Civil Code, Article 827).
Dastdarami A term of customary law used in northern areas of the country. It denotes the right of persons holding landed property in their possession and exploiting it without being legal owners of the property. The right in question is somehow similar to the notion of beneficial ownership in English law.
Day Name of the tenth month of Iranian solar year. See Iranian Calendar, infra.
Diyeh A term of the Islamic Law, meaning the indemnity for bodily injuries (including death resulted from killing).
Eddeh A term of the Islamic Law denoting a prescribed period of waiting during which a woman may not remarry after being widowed or divorced.
Esfand Name of the last month of Iranian solar year. See Iranian Calendar, infra.
Farvardin Name of the first Iranian month. See Iranian Calendar, infra.
Hosainiyeh See Hosainiyehs and Takyehs, infra.
Hosainiyehs and Takyehs Hossainiyeh is a name given to the place where the anniversary of the historical tragedy of "Karbala" is commemorated every year (in a general atmosphere of mourning) as a sign of veneration to martyrdom of Imam Hossain (peace be upon him) the third imam of shia. That tragedy took place in the month of Muhurram of the year 61 AH (680 AD). Karbala is a city in Iraq. Takyeh, is also a place where the ceremonies of mourning for martyrs of "Karbala" is held.
Investor-Agent Partnership (Mozarebeh) A contract by which one of the parties invests capital with the stipulation that the other party uses it for business and the profit therefrom be divided. The owner of the capital is the investor and the other party is agent or `mozareb’ (Civil Code, Article 546).
Involuntary Civil Partnership Under the Iranian Civil Law the partnership relation between different persons can be materialized involuntarily as well. For instance, the heirs become partners with regard to the estate left behind by the decedent, before distributing the same between themselves. This kind of relationship existing among the heirs, between the death of the deceased person and the date of distribution of the estate, is created involuntarily (Civil Code, Article 573).
Iranian Calendar Iranian solar year begins at the first equinox and divides into 12 months. The first 6 months are 31 days long and the next 5 months are of 30 days each. The last month of the year has 29 days in ordinary years and 30 days in leap years. The following table shows the names and duration of Iranian months and their correspondence to the months of the Gregorian calendar.
Months Number of days beginning at ending at Farvardin 31 March 21 April 20 Ordibehesht 31 April 21 May 21 Khordad 31 May 22 June 21 Tir 31 June 22 July 22 Mordad 31 July 23 August 22 Shahrivar 31 August 23 September 22 Mehr 30 September 23 October 22 Aban 29 October 23 November 21 Azar 30 November 22 December 21 Day 30 December 22 January 20 Bahman 30 January 21 February 19 Esfand 29* February 20 March** *30 days in Iranian leap years
** March 19 in Gregorian leap years
Iranian Dates and years (referred to in the Direct Taxes Act) Date Year corresponding to 03/16/1350 06/06/1971 06/30/1359 09/21/1980 12/03/1366 02/22/1988 12/29/1367 03/20/1989 06/13/1370 09/04/1991 06/07/1370 08/29/1993 01/21/1374 04/10/1995 11/27/1380 02/16/2002 1320 1941/42 1340 1961/62 1342 1963/64 1345 1966/67 1346 1967/68 1352 1973/74 1353 1974/75 1367 1988/89 1368 1989/90 1370 1991/92 1372 1993/94 1380 2001/2002 1381 2002/2003 1382 2003/2004 See also Iranian Calendar , supra
Islamic Consultative Assembly Iranian Parliament.
Khoms A religious tax imposed under the Islamic Law on Muslims
159 DIRECT TAXES ACT Iranian Calendar Iranian solar year begins at the first equinox and divides into 12 months. The first 6 months are 31 days long and the next 5 months are of 30 days each. The last month of the year has 29 days in ordinary years and 30 days in leap years. The following table shows the names and duration of Iranian months and their correspondence to the months of the Gregorian calendar.
Months Number of days beginning at ending at Farvardin 31 March 21 April 20 Ordibehesht 31 April 21 May 21 Khordad 31 May 22 June 21 Tir 31 June 22 July 22 Mordad 31 July 23 August 22 Shahrivar 31 August 23 September 22 Mehr 30 September 23 October 22 Aban 29 October 23 November 21 Azar 30 November 22 December 21 Day 30 December 22 January 20 Bahman 30 January 21 February 19 Esfand 29* February 20 March** *30 days in Iranian leap years
** March 19 in Gregorian leap years
Iranian Dates and years (referred to in the Direct Taxes Act) Date Year corresponding to 03/16/1350 06/06/1971 06/30/1359 09/21/1980 12/03/1366 02/22/1988 12/29/1367 03/20/1989 06/13/1370 09/04/1991 06/07/1370 08/29/1993 01/21/1374 04/10/1995 11/27/1380 02/16/2002 1320 1941/42 1340 1961/62 1342 1963/64 1345 1966/67 1346 1967/68 1352 1973/74 1353 1974/75 1367 1988/89 1368 1989/90 1370 1991/92 1372 1993/94 1380 2001/2002 1381 2002/2003 1382 2003/2004 See also Iranian Calendar , supra
Islamic Consultative Assembly Iranian Parliament.
Khoms A religious tax imposed under the Islamic Law on Muslims
Mahr A term of the Islamic Law of marriage. It means a sum of money or a property, which is agreed upon between the bride and bridegroom. The wife can claim it from the husband anytime after the date of marriage.
Mordad Name of the fifth month of Iranian solar year. See Iranian Calendar, supra.
Mozareb See Investor-Agent Partnership (Mozarebeh), supra.
New Year Bonus See Bonus and New Year Bonus, supra
Official Deed A term used with regard to two kinds of documents; those issued from the government organizations and the others that are registered by notaries public. The term as used in the Direct Taxes Act, denotes always the latter type of such documents.
Optional Sale in a contract of sale the parties may make a condition that if the seller gives the price back to the purchaser, within a specified period, he may exercise an "option" of cancellation of the transaction (Civil Code, Article 458). A sale transaction with such condition is called "optional sale".
Ordibehesht Name of the second Iranian month. See Iranian calendar supra.
Partnership bonds A special bond published by the authorized government organizations and entities.
Qum Name of the Iranian holy city where the most important center of the country for study of the Islamic law and jurisprudence is situated.
Readiness for Office See Readiness for Office and Suspension from Office, infra.
Readiness for Office and Suspension from Office Civil servants may assume several statuses during their life and as long as they are somehow connected with the public sector. Readiness for office is the status of an employee whose position is deleted as result of reorganizational measures and no other appropriate post is available for him at the present. He will remain as such until a new position is accorded to him. Suspension from office is the status of a civil servant accused of committing some misdemeanor, offence, etc. and he is suspended from the office till the competent forum issues a final judgment. In non of the above cases the relation between the employee and the employer (the government) is ended and the service of the employee may be restarted.
Ready for Office See Readiness for Office and Suspension from Office, supra.
Reward Contract (Jo,aleh), A contract under which a person undertakes to pay certain recompense in return for an act to be accomplished, whether the other party is specified or not (Civil Code, Article 561)
Substance A concept employed by the Iranian Civil Law to denote the corporeality of a property, that is understood as separate from the property’s yields or proceeds. The yields and proceeds of a property may be transferred to other per-
sons, while the owner retains the "substance" of the same for himself.
Suspension from Office See Readiness for Office and Suspension from Office, supra.
Takyehs See Hosainiyehs and Takyehs, supra.
Taxable value The respective Persian term means "transactional value", but in practice it is exactly the same concept as the "taxable value" in English tax terminology. The value in question has nothing to do with actual transactions -on real properties. Such properties are much more expensive than the so-called "transactional value" as used under the tax law. It is determined for tax purposes only and that is why the equivalent term "taxable value" was chosen.
Tie up, Tied up, Tying up (habs) A term used in the Islamic Law (as well as in the Iranian Civil Law) denoting the condition of a property that is made legally inalienable. The realization of this condition is a prerequisite for endowing properties. Endowment is defined under the Civil Law to be the tying up of the substance of the property and devoting its yield to certain (usually pious and religious) purposes (Civil Code, Article 55).
Tir Name of the fourth Iranian month. See Iranian Calendar, supra.
Vali A term of the Iranian Civil Law meaning the father and grandfather of the children who are under the legal age or are wards. The guardianship of such children is, under the Civil Law, vested with the father and grandfather, if they are alive and free from legal hindrance.
Zakat A religious tax levied under the Islamic Law on Muslims.