Iran - Crypto penetration

Due to sanctions and relatively high inflation, there is a high demand for crypto in Iran. In particular, mining has been developed. The government is constantly changing its policy, either banning or legalizing cryptocurrencies. The large population makes this country a large market with a developed gray exchange sector.

Iran has a moderate danger security level according to our rating. Jurisdiction has 50.2 points (from 100) for safety level in Numbeo crime rating (1). Homicide level (2) is 2.4 per 100,000 inhabitants a year.

The use of cryptocurrency as a payment method is banned inside the country. At the same time local business and the state use crypto to circumvent sanctions.

Prohibited (see paragraph above).

In 2018, Iran banned(3) trading and possession of cryptocurrency due to money laundering and terrorism financing concerns. All Iranian financial institutions, such as banks, credit institutions, and currency exchanges, were banned from handling or promoting cryptocurrencies.

In 2019, however, the government began to roll back this ban as sanctions were crippling their local currency. Cryptocurrency(4) was a relief from reliance on the United States dollar. The Central Bank of Iran’s new regulations allow for cryptocurrency possession and mining (5) but still include a ban on using digital currency as a payment system. Further, “it bars Iranians from holding large amounts of global cryptocurrencies in the same way they are officially prohibited from holding more than 10,000 euros.”

Towards the end of 2020, the Iranian government once again began exploring the possibility of reimplementing more controls on cryptocurrency as the price of Bitcoin was soaring, and the Iranian stock market and currency were severely falling. The only change to the regulations so far is more restrictions on cryptocurrency miners due to heavy energy usage.

In August 2019, Iran issued a regulation (6) recognizing crypto mining as a legal economic sector and became the first country (7) to use cryptocurrency as reserves to pay for imports and exports.

A study conducted in 2021 found that 4.5% of all bitcoin mining (8) occurred in Iran due to the country’s cheap electricity, not to mention the devaluation of its currency. According to the study, the annual electricity used for mining as of 2021 amounted to around 10 million barrels of crude oil, or 4% of Iran’s petroleum exports in 2020. But since 2020, and in exchange for providing cheap power to over a thousand locally based licensed miners from Iran, Turkey, China, and elsewhere, the Iranian government has required (9) them to sell their cryptocurrencies to the central bank, which in turn uses this digital money to fund imports and exports.

Iran's government has approved (10) in 2022 regulations for trading with cryptocurrencies, allowing the country to skirt some U.S. financial sanctions imposed over Tehran's nuclear program.

This news was announced on August 29, just weeks after Iran's Trade Development Organization approved its first official import order - worth $10 million for the import of cars -- using cryptocurrency.

Trade Minister Seyed Reza Fatemi Amin said the resolution "specifies all issues related to cryptocurrencies, including how to provide fuel and energy for mining them, and how to grant licenses." The new regulations allow for the import of any goods to the country. This move could enable Iran to circumvent U.S. sanctions that have crippled the economy and severely weakened the national currency, giving rise to the demand for cryptocurrencies, which are less regulated and can be used in transactions by Iranians where Western currencies are banned.

Tax name	Index
PIT tax Min	10
PIT tax Max	30
Corporate tax (CIT)	25
Min Individual CGT (for crypto)	25
Max Individual CGT (for crypto)	25
Wealth tax Min	0
Wealth tax Max	0

PIT

According to recent reports(11), the Iranian National Tax Administration has set the annual individual income tax brackets and rates for the 2022-23 tax year as follows:

up to IRR 672 million - 0%

over IRR 672 million up to 1,800 million - 10%

over IRR 1,800 million up to 3,000 million - 15%

over IRR 3,000 million up to 4,200 million - 20%

over IRR 4,200 million - 30%

CIT and CGT

‘Companies' standard corporate tax(12) ('CIT') rate is 25%. Capital gains from the sale of fixed assets, foreign dividends, and real estate income are also taxable at the same rate as CIT, i.e., at 25%.