Iran: VAT Exemption for Hybrid & Electric Vehicles

According to the Law on clean air, adopted by the Iranian parliament on July 16, 2017, Mr. Mohammad Masihi, an official from the tax administration has stated that all homegrown, ecofriendly, zero-emission hybrid and electric cars and motorcycles will benefit from 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 population more than 200,000. The five year program 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%.

Our team of professionals is here to help you assess the impact of this new law on your business.

For more info, feel free to contact:

Ali Najm
Client Relationship Manager Egypt, Iran, Lebanon, Iraq

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