Iran Investment Income Guide 2026

Overview — Taxation of Investment Income in Iran

Investment income in Iran is taxed under the Direct Tax Law (قانون مالیات‌های مستقیم), with significant variations depending on the type of instrument, the status of the recipient (resident vs. non-resident, individual vs. corporate), and whether the instrument is listed on a recognised exchange. The system is designed to encourage investment in the domestic capital market, particularly the Tehran Stock Exchange (TSE) and Iran Fara Bourse, through generous exemptions for listed securities.

Dividend Taxation

Resident individuals: Dividends received from Iranian companies are generally subject to a 0% withholding tax (WHT). The dividends are also exempt from personal income tax for individual shareholders. This makes Iranian equities tax-efficient for resident retail investors.

Resident corporate shareholders: Dividends received by Iranian companies from their subsidiaries or other Iranian companies are generally exempt from corporate income tax, following the participation exemption principle. The paying company does not withhold tax on dividend distributions to corporate shareholders.

Non-resident shareholders: Dividends paid to non-resident individuals and companies may be subject to withholding tax at rates specified in the relevant Double Tax Treaty (DTT). In the absence of a DTT, the domestic law rate applies. Iran has a relatively limited DTT network, but treaties with key partners may reduce WHT rates.

Interest Income Taxation

Bank deposits: Interest earned on bank deposit accounts in Iranian banks (Rial and foreign currency accounts) is generally exempt from income tax and withholding tax. This exemption applies to both resident and non-resident depositors and is a key feature of the Iranian banking system.

Government and corporate bonds: Interest (profit) on government bonds and certain corporate bonds may be subject to a 5% withholding tax. However, interest on Islamic bonds (Sukuk) issued under the Securities and Exchange Law may qualify for full exemption. The specific treatment depends on the bond structure and the issuer.

Non-residents: Non-residents receiving interest from Iranian sources may be subject to WHT at 0–5% depending on the instrument type and applicable DTT.

Royalty Taxation

Non-residents: Royalties paid to non-residents for the use of intellectual property, trademarks, patents, know-how, and similar intangible rights in Iran are subject to withholding tax at rates of 5–15%, depending on:

• The type of royalty (patents, copyrights, trademarks, etc.)
• The provisions of any applicable Double Tax Treaty
• The relationship between the payer and the recipient (related-party royalties may be subject to additional scrutiny under transfer pricing rules)

Residents: Royalty income received by resident individuals and companies is treated as ordinary income and taxed under the standard IIT (0–35%) or corporate tax (25%) rates, respectively.

TSE Securities — Tax Exemptions

Securities listed on the Tehran Stock Exchange (بورس اوراق بهادار تهران) and Iran Fara Bourse (فرابورس ایران) benefit from significant tax exemptions designed to promote capital market development:

• Capital gains on TSE shares: Fully exempt from income tax for individual investors
• Dividends from TSE-listed companies: Exempt from WHT and income tax for shareholders
• Trading profits: Gains from trading TSE securities (shares, rights, ETFs) are exempt for individuals
• Sukuk listed on TSE: Interest/profit payments on listed Sukuk may be exempt from WHT
• Corporate TSE investors: Companies may also benefit from partial exemptions on TSE-related income

These exemptions make the Iranian stock market one of the most tax-efficient investment channels in the country.

Islamic Bonds (Sukuk) — Special Treatment

Sukuk (صکوک) are Islamic financial certificates that comply with Sharia law (avoiding interest). Iran is a major issuer of Sukuk. The tax treatment includes:

• Profit payments: The profit (coupon) paid to Sukuk holders is generally treated as tax-exempt or subject to reduced withholding, depending on the Sukuk structure (e.g., Ijarah, Murabahah, Musharakah)
• Secondary market trading: Gains from trading Sukuk on the secondary market may be taxable or exempt depending on the investor type
• Issuers: Sukuk issuance expenses are generally deductible for the issuer
• Listed Sukuk: Sukuk listed on the TSE or Fara Bourse benefit from the same exemptions as other listed securities

The specific tax treatment of each Sukuk issuance is typically confirmed in a tax ruling from the INTA at the time of issuance.

Foreign Currency and Offshore Investment

Iranian residents may hold foreign currency and foreign securities subject to currency control regulations. Investment income from foreign assets (dividends, interest, capital gains) is technically subject to Iranian income tax, with foreign tax credits available. However, enforcement of foreign investment income taxation is limited due to:

• Capital controls and difficulty in repatriating funds
• Limited automatic exchange of information with foreign tax authorities
• The unofficial nature of much foreign currency investment in Iran

FAQs

Are dividends from Iranian companies really tax-free for individuals?

Yes, dividends received by resident individual shareholders from Iranian companies are not subject to withholding tax or personal income tax. This applies to both listed and unlisted companies.

Do I need to pay tax on my bank interest?

No, interest on bank deposits in Iranian banks is exempt from income tax. No reporting is required for this interest income.

How are royalties paid to non-residents taxed?

Royalties paid to non-residents are subject to withholding tax at 5–15%, depending on the type of royalty and any applicable Double Tax Treaty. The Iranian payer is responsible for withholding and remitting the tax to the INTA.

Is there a difference between listed and unlisted securities for tax purposes?

Yes, significantly. Listed securities (TSE, Fara Bourse) benefit from broad tax exemptions for individuals, while unlisted securities are generally subject to standard income tax treatment. This makes the listed market much more tax-efficient.

Disclaimer

This guide provides general information about the taxation of investment income 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 investment situation. InvestmentKit does not provide tax advice.