New Law Issued: Banks Required to Provide Individuals' Information to Tax Organization

With the issuance of the new 'Direct Taxes' law in Iran, banks and government organizations are required to provide information on individuals' and companies' bank accounts and transactions to the Tax Affairs Organization. According to a report from Tasnim News Agency on Friday, Hassan Rouhani, the President of Iran, announced the new 'Direct Taxes' law for implementation to the Ministry of Economy on Tuesday, August 27. Under this law, banks, financial and credit institutions, the Registration Organization, municipalities, and other entities related to income generation and asset registration are obligated to provide the specified information to the Tax Affairs Organization. The 'financial, monetary, credit, and capital' information of individuals includes the transactions of all bank accounts, bank facilities, and the financial transactions of stocks and 'other securities' that must be provided to the Tax Affairs Organization under this new law. Additionally, information related to currency and gold coin transactions, insurance policies, buying and selling assets, goods and services, imports and exports of goods, as well as contracts for commercial activities and 'any services' will also be provided to the Tax Affairs Organization. This law grants the government the authority to add a list of other necessary economic activity information to this law. It also mandates the Tax Affairs Organization to provide access for banks and insurance companies in Iran to the list of tax debtors so that they can consider this information when providing services to them. Officials from the Ministry of Economy and members of the Iranian Parliament have previously reported varying figures regarding tax evasion by Iranians, citing the lack of complete information on individuals' economic activities as one of the reasons for tax evasion. Meanwhile, Hossein Vakili, Deputy of the Tax Affairs Organization, reported on Sunday, June 7, that tax evasion in Iran amounts to 120 to 130 trillion tomans annually, stating that the lack of complete information is one of the organization's challenges in preventing tax evasion. He also announced that a comprehensive tax hardware system has been established in the Tax Affairs Organization, which will integrate all national databases. Mr. Vakili's statements come as Ali Askari, head of the Tax Affairs Organization, and Abuzar Nadimi, a member of Parliament, had previously estimated annual tax evasion in the Iranian economy to be 11 trillion tomans.