Tax authorities in Iran have called for legislation that would support the development of legalized cryptocurrency trading exchanges in the country.
The Iranian National Tax Administration (INTA) put forward proposals for a new legal regime for cryptocurrency trading after a recent announcement by President Hassan Rouhani that measures would be introduced. The tax authority said the legal framework should be drafted broadly and avoid creating harsh restrictions on crypto exchanges that could fuel the growth of a black market. The proposal aims to collect more tax revenues from the sector.
INTA proposals cover three different types of taxation.
The INTA proposals cover three types of taxation: capital gains, fixed base tax, and occupational tax. The proposals stop short of suggesting mechanisms or rates of taxation that could be applied. It also covers decentralized finance (DeFi) and will introduce an upper limit on transactions through these types of platforms in a bid to comply with anti-money laundering rules. The INTA is following similar efforts to regulate cryptocurrency in the country spearheaded by the Iranian Parliament Commission on Economy, which drafted a bill to restrict how digital currencies can be used.
Cryptocurrency mining is outlawed in Iran till September.
Though block reward mining remains legal in Iran, it has been temporarily outlawed until at least September due to concerns over the impact of mining activities on the country’s creaking energy grid. Earlier, Iran had outlawed crypto mining activities in response to sweeping power outages across the country. While converting digital currencies is also legal under current rules, cryptocurrency can only be used to pay for imports into Iran and cannot be used as part of domestic transactions. Several other countries across the globe are actively working on crypto regulations. South Korea is all set to enforce new tax regulations on the crypto sector starting next year.