Iran Capital Gains Tax Guide 2026

Overview — No Separate CGT in Iran

Iran is one of the few countries that does not maintain a separate capital gains tax regime. Instead, capital gains are treated as ordinary income under the Direct Tax Law (قانون مالیات‌های مستقیم) and aggregated with other income sources for taxation under the progressive IIT rates (0–35%). This approach means that the tax treatment of a capital gain depends entirely on the taxpayer's total income level and corresponding marginal rate, rather than on a fixed CGT rate. The absence of a separate CGT simplifies the tax system but can result in high marginal rates for high-income taxpayers realising large gains.

Taxation of Gains from Shares and Securities

Tehran Stock Exchange (TSE) shares: Capital gains realised by individual investors from the sale of shares listed on the Tehran Stock Exchange (بورس اوراق بهادار تهران) and the Iran Fara Bourse (فرابورس ایران) are generally exempt from income tax under the provisions of the Direct Tax Law. This exemption is a key incentive to encourage retail investment in the stock market. Conditions include:

• The shares must be listed on the TSE or Fara Bourse
• The exemption applies to individual (non-corporate) investors
• No minimum holding period is required
• The exemption covers both realised gains and dividends received from listed companies

Corporate shareholders: Companies realising gains from TSE shares may be subject to corporate tax at 25% on the gain, unless a specific exemption applies under the Direct Tax Law or annual budget laws.

Taxation of Gains from Property

As detailed in the property tax guide, gains from the sale of real estate are taxed as ordinary income under the progressive IIT rates. Key points:

• The gain is calculated as sale proceeds minus the original purchase price (plus documented improvement costs and allowable expenses)
• No indexation: The gain is calculated in nominal terms without adjustment for inflation — this creates a potential tax on inflationary gains, particularly in Iran's high-inflation environment
• No ST/LT distinction: There is no reduced rate for long-term holdings, unlike many other jurisdictions
• Principal residence relief may partially or fully exempt the gain if sale proceeds are reinvested in a new home
• Frequent property trading may be treated as business income rather than capital gains

Taxation of Gains from Bonds and Sukuk

Capital gains from the sale of bonds, Islamic bonds (Sukuk, صکوک), and other debt securities are generally taxed as ordinary income. However:

• Interest income from bank deposits and government bonds may be tax-exempt or subject to final withholding (see investment income guide)
• Sukuk issued under specific regulations may benefit from preferential tax treatment
• Gains from trading bonds on the secondary market are generally taxable

No Indexation Allowance

Iran's tax system does not provide indexation relief for capital gains. This means the taxable gain is calculated on a nominal basis — the sale price minus the original purchase price — without adjusting the cost base for inflation. Given Iran's historically high inflation rates (often exceeding 30% per year), this results in a significant erosion of real returns and can lead to tax being charged on purely inflationary gains. The absence of indexation is a notable disadvantage for investors in long-term assets, particularly real estate.

No Short-Term vs Long-Term Distinction

Iranian tax law does not differentiate between short-term and long-term capital gains. Whether an asset is held for one day or ten years, the gain is taxed in the same manner — as ordinary income under the progressive IIT rates. This is different from many other tax systems (e.g., US, UK, India) where long-term gains benefit from reduced rates. The absence of a holding period distinction means there is no tax incentive to hold assets for longer periods.

Foreign Assets and Cross-Border Gains

Iranian tax residents are subject to tax on their worldwide income, including capital gains realised on assets located outside Iran. Foreign tax credits are available for taxes paid abroad on foreign-source capital gains. However, the practical enforcement of tax on foreign gains is limited due to:

• Restrictions on foreign currency transactions and capital outflows in Iran
• Limited exchange of information with foreign tax authorities
• Practical difficulties in assessing and collecting tax on foreign assets

Non-residents are taxed only on gains from Iranian-source assets.

FAQs

Is it true that TSE stock gains are completely tax-free for individuals?

Yes, under current law, capital gains realised by individual investors from shares listed on the Tehran Stock Exchange and Fara Bourse are exempt from income tax. This exemption is one of the key attractions of investing in the Iranian stock market.

How is the gain calculated for property sales?

The gain is the sale price minus the original purchase price, plus documented improvement costs (renovations, extensions) and allowable sale expenses (commission, advertising). No indexation is applied. The nominal gain is then added to other income and taxed at progressive IIT rates.

Are cryptocurrency gains taxable in Iran?

The tax treatment of cryptocurrency gains in Iran is still evolving. The central bank and the INTA have issued limited guidance. Generally, gains from crypto trading may be treated as ordinary business income for frequent traders, while occasional gains may fall under capital gains rules. Specific regulations are expected.

Is there a threshold below which capital gains are not taxed?

Since capital gains are aggregated with other income, they benefit from the same annual exemption threshold as other income (approximately IRR 1,200,000,000). If a taxpayer's total annual income (including gains) is below this threshold, no tax is due.

Disclaimer

This guide provides general information about the taxation of capital gains in Iran for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Iranian tax advisor (مشاور مالیاتی) or the INTA directly for advice specific to your situation. InvestmentKit does not provide tax advice.