New tax trouble for exporters

According to Inpia , the main export challenge explored in this working group is the blocking of part of the exporters’ resources, which In Sibel there is criticism of economic activists. The Tax Administration recently issued a circular based on the Budget Law of 1998, according to which the refund of value added tax to […]

According to Inpia , the main export challenge explored in this working group is the blocking of part of the exporters’ resources, which In Sibel there is criticism of economic activists. The Tax Administration recently issued a circular based on the Budget Law of 1998, according to which the refund of value added tax to exporters and the application of export exemptions are subject to the return of currency to the economic cycle by the exporter. This directive has led exporters to witness a “resource freeze”.

Pursuant to this directive, a zero rate and tax exemption were conditional on revenues from the export of goods and services. The policymaker made the payment of any incentives and granting tax exemptions to export activists conditional on the return of export currency to the country’s economic cycle. According to the IRS, if traders return their export currency to the country on time, the zero tax exemption and rate will not apply to their performance in 1997 and 1998. The policymaker also stressed in the circular that the application of zero tax rates and tax exemptions to revenues from exports of goods and services, including non-oil products, agricultural products and raw materials, is subject to the return of export currency within the bank’s rules and regulations. It is central. But with the issuance of this directive, a wave of criticism from business owners and exporters went to the government and policymakers. According to private sector activists, the conditions set out in this directive make it difficult to qualify for export concessions; In this way, those exporters who do not return their currency to the economic cycle on time, the zero tax rate will not apply to their tax performance in 1997 and 1998, and as a result, exporters can not use tax exemptions. From the point of view of activists, this policy is punitive for exporters. The troubles created by this circular caused the members of the specialized working group of the Dialogue Council of the Iran Chamber to examine the exporters’ criticisms of the circular of the Tax Affairs Organization in a meeting. The timing of export exemptions and VAT refunds to exporters was one of the most significant intellectual concerns raised at the meeting. At the end of the meeting, economic activists were asked to raise this issue in the main meeting of the Dialogue Council to decide on it. Trustees and policymakers have always insisted on increasing non-oil exports; But this emphasis is lacking in many directives and guidelines. Private sector activists believe that a new impetus is being seen by policymakers every day for the growth of non-oil exports in the form of directives. In the latest signals sent by business owners and exporters, the way VAT is refunded for exports has become a point of contention. Activists say the IRS issued a circular based on the 1998 budget law, which states that the refund of value added tax to exporters and the application of export exemptions are subject to the exporter returning the currency to the economic cycle. Blocking some of the exporters’ resources is a problem that has been criticized. The evaluations show that the implementation of part (1) of paragraph (c) of Note (8) of the Budget Law of 1998 has caused problems for exporters which have been criticized. Explaining this issue, Ali Chaghrvand, Director of Business Research of the Dialogue Council, said: “According to Part (1), Paragraph (c), Note (8) of the Budget Law of 2009, any zero rate and tax exemptions for revenues from exports of goods and services and refunds” Taxes and duties subject to Article (13) of the Value Added Tax Law, are applicable for the performance of the years 1397 and 1398 in which the currency from exports is returned to the economic cycle of the country according to the regulations announced by the Central Bank. He continued: following this paragraph of the budget law, the Tax Affairs Organization issued a circular and notified the tax offices with the content that until the notification of regulations and instructions and compliance with all regulations by taxpayers, from any refund of taxes and value added duties only to Exporters of goods and services related to the financial periods of 97 and 98 in the current year should be avoided. In this regard, Mohammad Lahouti, President of the Exporters Confederation of Iran, also emphasized: Exporters who have exported their goods since January 1, 1997, have not received a single rial in value added tax, and if an exporter has circulated its capital twice in the past few months , 20% of his resources are frozen with the Tax Administration, and this is a problem that executive bodies such as the Central Bank and the Tax Administration are unable to solve, because this restriction is provided for in the budget law. According to economic activists, even with the instructions issued by the Tax Affairs Organization on September 4, this year, the current problems will not be solved, because if an exporter within this four-month period set by the Central Bank (in order to return export currencies), 50% If the foreign exchange obligation has been made and the tax administration has reviewed and paid the value added tax accordingly, this performance will be finalized and if in the next quarter, the currency owed for the year 1997 is returned, it will no longer be refunded and the tax will be finalized.