Masoud Pezeshkian, the president of the Iranian regime, has ordered the implementation of the “Speculation and Arbitrage Tax Law.” The legislative process for this law began in 2020, and it aims to tax half of the increase in the value of citizens’ assets caused by inflation during its first two years of enforcement.
The “Speculation and Arbitrage Tax Law,” which was approved by the regime’s Majlis (parliament) on June 29, was formally enacted by Pezeshkian on Friday, August 15.
Since the 1980s, the Iranian regime has sought to impose taxes on citizens’ capital gains from assets such as property, cars, gold, and foreign currency, but these attempts had never been put into practice.
Only $1.5 Million Paid Out of $70 Million in Taxes Owed by Luxury Homeowners in Iran
The law covers real estate, vehicles, gold, jewelry, silver, platinum, foreign currency, and cryptocurrencies. To enforce it, the Ministry of Economy is required to create an intelligent system that links to the registries of deeds, the stock exchange, customs, and the Central Bank in order to track transactions subject to taxation.
First two years: taxing citizens on inflation
Although the regime’s state-run media welcomed this law with headlines such as “Considering the effect of inflation for the first time,” evidence shows that the government also intends to tax the burden of inflation itself. In practice, during the first two years, citizens will be taxed not only on profits but also on 50% of the increase in asset prices caused by inflation.
For example, if a citizen purchased an apartment in 2024 for 50 billion rials (about $54,000), and due to 40% inflation, its value rises to 80 billion rials (about $86,000) in 2025, the 30 billion rial price difference would be considered profit.
Out of this 30 billion rials, 20 billion comes from inflation. According to the law, 10 billion rials (half of the inflation effect) plus 10 billion rials of actual profit would be subject to taxation. In this way, during the first two years of enforcement, the government will also be taxing inflation itself.
However, the text of the law includes numerous exemptions from paying taxes.
Details of the new law
According to the law, the sale of taxable assets within one year will be subject to a tax rate of 20% to 40%. Sales between one and two years will be taxed at 10% to 15%, and sales after more than two years will be taxed at lower rates.
The first residential property and one vehicle per family are exempt, as are agricultural, livestock, industrial, and mining properties used for production. Family transfers, inheritances, and legally registered settlements are also exempt.
In some sections of this 28-article law, penalties are foreseen, including preventing deed transfers, bans on commercial activity, and fines of up to twice the owed tax.
Through this law, the Iranian regime seeks to offset the effects of its recent regional setbacks and international sanctions by imposing heavy taxes on the people. In Iran, however, the largest financial transactions and assets are controlled by regime institutions, all of which remain tax-exempt.
