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The Iranian National Tax Administration (INTA) proposed to legalize operations of cryptocurrency exchanges for taxation purposes recently. The authority is pushing to limit trading operations to a few authorized exchanges that are permitted to track transactions while converting currencies.
Iranian Tax Authority Wants to Legalize Cryptocurrency Exchanges
Earlier in June, Iran’s President Hassan Rouhani had emphasized the need for a legal framework to monitor crypto trading in the country. He asserted that communication of laws is necessary at the earliest to preserve national interests and protect people’s capital.
Now the INTA has stepped forward with a proposal to regulate the industry without creating reverse effects and conditions for black market operations.
Per the proposal, the authority is seeking to collect tax on capital gains, fixed base tax, and occupational tax from crypto trading platforms, although, it does not specify the mechanism for implementing these taxes.
Decentralized finance (DeFi) has also been taken into consideration by the proposal. To comply with anti-money laundering regulations, the INTA wants to set a cap on all transactions on decentralized exchanges.
The proposal makes no improvement to existing restrictions on crypto payments. According to 2019 legislation, Iran prohibits the use of digital currencies for payments unless they are mined in the country and used for imports by banks and licensed moneychangers.
Crypto Mining Still Legal But Will There Be More Taxes?
Iran is one of the few countries where crypto mining is a legal business. However, miners are required to follow the ruleset introduced in 2019, which recognizes them as owners of the mined assets.
Local media reports indicate that INTA’s recent proposal has no new measures for the mining industry. The authority has previously highlighted that mining is a taxable business that should follow the central bank’s regulations in repatriating their overseas earnings. In doing so, such enterprises become eligible for tax exemptions like non-oil exporters.
Presently, crypto miners in Iran are facing a temporary ban until September due to concerns about heightened energy usage in the summer months. The ban came into effect in May, when President Rouhani highlighted that 85% of Iran’s crypto mining operations were unlicensed. Mining in Iran has been linked with increased electricity abruptions and worsening air quality.