What does zero tax rate mean?

What does zero tax rate mean?

In order to improve the economic situation and support the production sector and prevent the bankruptcy of private businesses and increase job opportunities, the legislator raises a debate in setting taxes as a zero tax rate. Zero tax rate means that the legislator exempts these people from paying taxes for a certain period of time by using financial and tax policies and in order to support producers and investors. The duration of tax exemption in this field is specific and determined by the legislator.

What is the difference between zero tax rate and tax exemption?

When a business or an economic company does not have any economic activity in a certain period, it is still obliged to submit its declaration in full to the Tax Administration at the end of the financial year, and the absence of economic activity does not mean a zero tax rate, and if it is not submitted, Declarations by these companies will be subject to fines, but the zero tax rate, as mentioned in the above lines, includes non-governmental economic enterprises in order to support private businesses.
Of course, these same companies must also submit their declaration to the tax affairs organization on the due date, and after submitting the declaration, their taxes will be calculated and announced based on the zero rate. On the other hand, tax exemption means that some businesses, such as wheat producers, are exempted from paying taxes in general and forever, but the zero tax rate has a specific period and is not permanent.

How many years will the tax be implemented at a zero rate?

The zero tax rate for non-governmental production units or service enterprises such as hospitals, hotels and tourism centers will be applicable for 5 years from the date of operation and after that these enterprises will be subject to tax payment like other people.

Zero tax rate for less developed areas

Areas that include less developed cities and towns and have been fully identified, if businesses and economic and production enterprises are established in them, of course, with the titles mentioned above, they can be exempted from the zero tax rate law. to benefit for a period of ten years, so that during this period, with the possibility of not paying taxes for them, the created jobs will be maintained and developed.

Tax at zero rate for special economic zones

Companies and economic enterprises that exist in the special economic zone or are established in these zones can benefit from the zero tax rate law for the development of their business and production for two years and seek to develop their production activity and expand the opportunity. jobs in that area.

It is mandatory to submit a tax return

In order to benefit from the zero rate tax law, all businesses and people who are subject to that law must submit their declarations within the stipulated time, and the zero tax rate law does not mean not submitting tax declarations.
Another issue regarding the less developed areas that is foreseen in this law is that if after ten years the economic enterprise is still not profitable and their total income is not double the initial capital, the law of zero tax rate will still apply to them. it will be
 
Financial Tax Group of Iran Consultants Authority

This post is written by Arambnamkhda