- The Iranian National Tax Administration (INTA) has submitted a proposal for legalizing taxation on crypto trading platforms.
- Iranians daily trade falls somewhere between $16 to $20 million.
- The proposed tax law also limits transactions on decentralized exchanges.
The Iranian National Tax Administration (INTA) has submitted a proposal for legalizing taxation on crypto assets trading platforms based in the country.
According to a proposal submitted by a local media outlet, the taxing body has called for legalizing virtual asset exchanges. Reportedly, INTA believes the lack of a regulatory framework can do more damage to the country’s economy as it would pave the way for a black market to emerge.
Recent researches reveal Iranians daily trade somewhere between $16 to $20 million worth of cryptocurrencies. Therefore, bringing taxation on the exchanges can make a considerable source of income for the Iranian government.
An excerpt from the draft proposed by INTA reads:
Legalizing crypto exchanges is necessary [for levying tax]. Legal operations must be limited to authorized exchanges that are allowed to convert currency while keeping track of transactions.
INTA would reportedly use transactions as the primary source of identifying the amount of tax. “Regulations must include penalties and legal consequences for legal exchanges refusing to provide users’ records to INTA,” the proposal said.
Earlier in June, Iran President Hassan Rouhani asked for regulating crypto trading and said the legalization of cryptocurrencies can protect national interests. “For legalizing the activity of cryptocurrencies and protecting people’s capital in this area, we must think of a solution as soon as possible and lay down and communicate the necessary laws and instructions,” Rouhani stated.
INTA Proposes 3 Tax Regimes
The Iranian National Tax Administration has outlined three tax regimes, including “tax on capital gains, fixed base tax and occupational tax.” However, the drafted proposal does not go into detail regarding the mechanisms that might be used for taxing digital assets.
The proposed tax law also includes decentralized finance (DeFi) exchanges. In order to act in accordance with Anti-Money Laundering (AML) regulations, the tax proposal aims to bring transaction limitations for decentralized exchanges.
If the tax proposal is passed, cryptocurrency trading would become the second crypto-related regulated activity in Iran. Back in 2019, Iran acknowledged the mining of digital assets as a legal industry. Consequently, Iran’s tax body introduced tax regulations for crypto miners.
As of early 2021, Iran accounted for approximately 5% of the world’s Bitcoin mining hashrate. However, the country, in May, declared a four-month ban on Bitcoin and crypto mining due to “energy concerns.” More recently, the country’s Interior Ministry suspended the Iran Blockchain Association.
