Iran: VAT exemption for hybrid and electric vehicles

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Iran: VAT exemption for hybrid and electric vehicles

AdobeStock_179693284_hybrid

According to the law on clean air, adopted by the Iranian Parliament on July 16 2017, Mohammad Masihi, an official from the tax administration, stated that all home-grown, eco-friendly, zero-emission hybrid and electric cars and motorcycles will benefit from a tax exemption.

The old and high emission transport system is one of the main causes of pollution in metropolises and should be replaced by an eco-friendly transport system. However, this replacement requires strong infrastructure, bears high costs and involves lot of resources.

According to Article 9 of the new law, the Ministry of Interior, in cooperation with the Ministries of Industry and Mines, Commerce and Economic Affairs and Finance, is obliged to update the urban public transport system with a priority on cities with a population of more than 200,000. The five-year programme is planned to include granting loans, offering incentives and removing import duty on hybrid and electric cars and motorcycles.

Local companies will be exempt from paying VAT on such vehicles. As a reminder, the current VAT rate for the fiscal year is 9%.

najm.jpg

Ali Najm (ali.najm@eurofast.eu)

Eurofast Global

Tel: +357 22699222

Mobile and Telegram: +98 9123138762

Website: www.eurofast.eu

more across site & shared bottom lb ros

More from across our site

Kingsley Napley’s claimants are arguing that taxing the provision of education breaches the European Convention on Human Rights
While pillar two can progress without the US, it won’t reach the same heights without American involvement, argues Renáta Bláhová, founding partner of BMB Partners Taxand
There are unanswered questions as to how foreign investors could reclaim money via tax credits, advisers suggested
Amid an ever-changing tax environment, India’s advisory market is bustling with competition ahead of the 2025 World Tax rankings and ITR Awards
The deal comes after PwC had accused Paul McNab of using confidential information; in other news, McDermott hired a new London tax head from a US rival
Looking at transfer pricing simplification is “obviously helpful”, but it should be done in line with current standards, a senior government figure reportedly said
The UK Government’s plans to close the tax gap via increased HM Revenue and Customs investment have failed to impress local tax advisers
Under the merged scheme for R&D tax relief introduced last year, rules on contracted out R&D have changed. James Dudbridge argues for a proactive approach when reviewing companies’ commercial arrangements
Cultural nuances could account for tax advisers’ perceived poor cost management, a local partner told ITR
Updated rules represent a significant shift in the Luxembourg TP landscape and emphasise the need for robust arm’s-length calculations, says Vanessa Ramos Ferrin of TransFair Pricing Solutions
Gift this article