Iran VAT Return Skill v2.0

Section 1 -- Quick reference

Field	Value
Country	Iran (Islamic Republic)
Combined rate	10% (9% VAT + 1% municipal tax)
Zero rate	0% (exports)
Exempt	Unprocessed agricultural, bread/flour, books, medical, education, banking/insurance, public transport, handmade carpets
Filing portal	https://tax.gov.ir
Authority	Iranian National Tax Administration (INTA)
Currency	IRR (Iranian Rial)
Filing frequency	Quarterly (seasonal, Solar Hijri calendar)
Primary legislation	VAT Law of 2008; 2025 Budget Act
Contributor	Open Accounting Skills Registry
Validated by	Pending
Last research update	April 2026

Conservative defaults:

Ambiguity	Default
Unknown rate	10% (9% + 1%)
Unknown purchase status	Not deductible
Unknown counterparty	Domestic Iran

---

Section 2 -- Required inputs and refusal catalogue

Minimum viable -- bank statement. Acceptable from Bank Melli, Bank Mellat, Bank Saderat, Bank Tejarat, Parsian Bank, or any Iranian bank.

Refusal catalogue:

R-IR-1 -- Free Trade Zone. Trigger: operations in Kish, Qeshm, Chabahar, Arvand, Aras zones. Message: "Free zone VAT rules vary by zone. Escalate to specialist."

R-IR-2 -- Oil/gas sector. Message: "Escalate to specialist."

---

Section 3 -- Supplier pattern library

3.1 Iranian banks (exempt -- exclude)

Pattern	Treatment	Notes
BANK MELLI, MELLI IRAN	EXCLUDE	Exempt financial service
BANK MELLAT	EXCLUDE	Same
BANK SADERAT, BANK TEJARAT	EXCLUDE	Same
PARSIAN BANK, PASARGAD BANK	EXCLUDE	Same
INTEREST, LOAN	EXCLUDE	Out of scope

3.2 Government

Pattern	Treatment	Notes
INTA, SAZMAN MALIYATI	EXCLUDE	Tax payment
CUSTOMS, IRICA	Check for import VAT	Duty exclude; VAT recoverable
TAMIN EJTEMAEI, SOCIAL SECURITY	EXCLUDE	Social insurance

3.3 Utilities

Pattern	Treatment	Notes
TAVANIR, BARGH	Domestic 10%	Electricity
MOKHABERAT, MCI, IRANCELL, RIGHTEL	Domestic 10%	Telecoms

3.4 SaaS and digital

Pattern	Treatment	Notes
Non-resident digital services	Reverse charge 10%	Subject to payment restrictions

---

Section 4 -- Worked examples

Example 1 -- Standard domestic sale

Input: Company sells goods IRR 100,000,000 net. Standard-rated.

VAT (9%) = IRR 9,000,000. Municipal (1%) = IRR 1,000,000. Total tax = IRR 10,000,000. Gross = IRR 110,000,000.

Example 2 -- Free zone to mainland

Goods from Kish Free Zone to Tehran. Treated as import. VAT at 10% at customs checkpoint.

---

Section 5 -- Classification rules

5.1 Standard rate 10% (9% VAT + 1% municipal)

Single combined rate for all taxable supplies. Both components reported separately on return.

5.2 Zero-rated (0%, input recoverable)

Exports of goods/services outside Iran. Goods to Free Trade Zones (conditions).

5.3 Exempt (no VAT, no recovery)

Unprocessed agricultural, livestock, bread/flour, books/newspapers, medical/pharmaceutical, education, banking/insurance, public transport, handmade carpets, gold bullion.

---

Section 6 -- VAT return form structure

Output

Section	Description
Taxable sales	Sales at 10% combined
Zero-rated	Exports
Exempt	Exempt supplies
VAT component	9% portion
Municipal tax	1% portion
Reverse charge output	Self-assessed on imported services

Input

Section	Description
Input VAT on purchases	9% component recoverable
Input municipal on purchases	1% component recoverable
Customs VAT	Import VAT
Reverse charge input	Self-assessed input

Net

Output minus input. Credit brought forward from prior season.

---

Section 7 -- Reverse charge and imports

Services from non-resident: self-assess at 10% (9% + 1%). Claim input if taxable. Net zero.

Import of goods: VAT on CIF plus customs duties plus commercial profit tax. Collected by IRICA.

---

Section 8 -- Deductibility and blocked input

Blocked: personal-use items, purchases for exempt supplies, entertainment (above limits), passenger vehicles for personal use, gifts/donations (above limits).

---

Section 9 -- Filing, deadlines, and penalties

Filing is quarterly aligned to Solar Hijri seasons:

Season	Months	Deadline (approx. Gregorian)
Spring	Farvardin-Khordad	~July 6
Summer	Tir-Shahrivar	~October 7
Autumn	Mehr-Azar	~January 5
Winter	Dey-Esfand	~April 4

Violation	Penalty
Late filing	10% of tax due
Late payment	2.5% per month
Failure to register	Backdated assessment + penalties

---

Section 10 -- Edge cases, test suite, and escalation

Edge cases

EC1 -- VAT/municipal split. Always report 9% and 1% separately.

EC2 -- Free zone to mainland. Treated as import. VAT at customs.

EC3 -- Agricultural exemption. Unprocessed wheat exempt. No output, no input recovery.

EC4 -- Foreign SaaS. Reverse charge at 10%. Payment restrictions do not change VAT treatment.

EC5 -- Export with docs. Zero-rated if export documentation exists.

Test suite

Test 1 -- Standard sale. IRR 100M net. Expected: VAT IRR 9M, municipal IRR 1M, total IRR 10M.

Test 2 -- Export. IRR equivalent of USD 10,000. Expected: 0%. Input recoverable.

Test 3 -- Reverse charge. Indian consulting USD 5,000. Expected: 10% self-assessed. Net zero.

Test 4 -- Exempt medical. Medicines IRR 500M. Expected: no output. Input IRR 20M not recoverable.

Test 5 -- Import. CIF IRR 1B + duty IRR 100M. Expected: VAT IRR 99M (9%), municipal IRR 11M.

Escalation protocol

REVIEWER FLAG / ESCALATION REQUIRED
[Standard format]

Out of scope -- direct tax

• Corporate income tax: 25%
• Personal income tax: progressive
• Social security: employer 23%, employee 7%

Prohibitions

• NEVER apply rate other than 10% to standard taxable supplies
• NEVER allow input recovery on exempt supplies
• NEVER ignore municipal tax (1%) -- always collected with VAT
• NEVER issue invoices without Farsi text
• NEVER use Gregorian dates on official filings
• NEVER compute numbers -- engine handles arithmetic

---

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com.