Iranian Tax Authority Urges Regulators to Legalize Cryptocurrency Exchanges – Regulation Bitcoin News
The Iranian National Tax Administration (INTA) has put forward a proposal to tax digital asset exchanges operating in the country. The authority calls for the legalization of their activities, fearing restrictions could negatively affect tax collection.
Tax Agency Wants to Obtain User Data From Authorized Exchanges
Seeing an opportunity to use exchange transactions as a basis for taxation, the INTA has urged regulators in Tehran to legalize crypto trading platforms. In an excerpt from its draft proposal quoted by Iranian media, the tax authority insists:
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.
The tax administration also warns against imposing stringent measures regarding crypto exchanges as it believes they would have “reverse effects” and create conditions for a black market to form. At the same time, the INTA stresses that regulations must envisage penalties for entities that refuse to provide it with their users’ records.
INTA Proposes Three Tax Regimes for Iranian Crypto Exchanges
Iran’s tax agency has prepared three tax regimes that can be applied to digital currency trading platforms – “tax on capital gain, fixed base tax and occupational tax,” the English language news outlet Eghtesad Online detailed. The proposal does not elaborate on the precise taxing mechanisms for exchange operators.
Another key element concerns decentralized digital asset exchanges. Iranian tax officials want to introduce a cap on the transactions that can be processed through this kind of platform, in line with existing anti-money laundering regulations in the Islamic Republic.
If the Iranian government accepts the tax authority’s proposal and suggestions, cryptocurrency trading will join mining and become another regulated bitcoin-related activity. In 2019, Tehran recognized the minting of digital coins as a legal industry and soon after, the INTA introduced rules for the taxation of miners.
Iran has so far licensed several dozen mining entities and they are obliged to pay the same taxes as companies involved in other industrial activities, with few exceptions. Just like non-oil exporters, for example, mining businesses are eligible for tax exemption if they repatriate their overseas earnings. However, tax regimes taking into account the location of industrial units and their distance from major cities do not apply to the crypto mining industry.
The rising popularity of cryptocurrencies has worried officials in Tehran as digital assets have attracted capital from traditional markets. In mid-May, the leadership of the Iranian parliament asked the tax agency to profile the owners of domestic crypto exchanges. Around the same time, the Iran Fintech Association warned that restricting crypto trading would deprive the sanctioned nation of opportunities.
Iranian authorities have been trying to curb crypto-fiat trading although banks and moneychangers were allowed to process cryptocurrency minted by licensed miners inside Iran to pay for imports. And earlier this month, legal experts from the president’s administration stated that crypto swapping is not banned in Iran.
Do you expect Iran to eventually legalize cryptocurrency trading? Share your thoughts on the subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.