What Is Tax Evasion and How Is It Prosecuted in Iran?

Introduction

Tax evasion is one of the most significant financial crimes in Iran and has recently been pursued more aggressively by the government and the Iranian National Tax Administration (INTA). But does every unpaid tax count as a crime? What’s the difference between tax debt and tax evasion? What are the penalties, and how does the legal process work?

In this article, we break down everything you need to know about tax evasion in Iran in simple and practical terms.

What Is Tax Evasion?

According to Article 274 of the Direct Taxation Act (Amended 2015):

“Tax evasion is defined as any deliberate act intended to avoid the payment of actual and lawful taxes.”

In plain language:

Tax Evasion vs. Tax Debt

What Actions Count as Tax Evasion?

Based on Article 274, common acts of tax evasion include:

Falsifying books, records, or financial documents

Hiding business activities or income

Using another person’s commercial card for imports/exports

Failing to issue invoices or issuing fake ones

Not registering a business with tax authorities

Refusing to submit required information to INTA

Note: Merely paying taxes late is not a crime — intent to deceive or conceal is essential.

Penalties for Tax Evasion in Iran

According to Article 274 and its subclauses:

6 months to 5 years of imprisonment

Fines equal to 2–3 times the unpaid tax

Ban on practicing a profession or running a business for up to 10 years