According to the amendment to the cheque Act, the issuance and drawing a cheque to the bearer, drawing and transfer a cheque in just physical form, issuance checkbooks for the persons with bounced cheques, bankrupts and persons in failing circumstances and not able to pay the amounts of cheques is prohibited.
The central bank in the present year must provide the necessary infrastructure for the recipient of the cheque to make it possible to inquire about the latest status of the check drawer. Also, information such as the validity limit of the drawer, the history of the bounced checks in the last three years, and the number of unsettled obligations should be provided.
In the first stage, the proposal of the Iranian Society of Certified Public Accountants to extend the three-month postponement of the general meetings of stock exchange companies has been approved due to the Corona Virus situation.
Given that there is no explicit provision in Iran’s Commercial Code regarding the postponement of meetings, the government has enacted this approval.
Consultations are also being held on the meetings of other public and private sector companies, and its information will be provided as soon as the relevant documents are received.
One of the vice presidents in the Ministry of Industry, Mine and Trade, referring to the recently approved regulation of the Monetary and Credit Council on the determination of the bank debt of the production units.
This approval shows, all production units licensed by the Ministry of Agriculture and the Ministry of Mine and Trade, by the end of September, may Settle on 7.5% of their debt to the banking system. With a 4-month braking period and within five years of installment of debts, they are permitted to settle their debt and benefit from banking services and facilities.
Following the additional clause 7 of the bill of the general budget of Iran for 1399, imports of light and heavy vehicles (with the priority of hybrid cars), mining and road construction machinery with foreign currency are permitted under the laws and regulations.
Reviews from the last two years show that 680 import companies were operating, which with the import ban of cars now remaining nine-car importers, are working, which operate at their minimum capacity.
By the verdict of the General Board of the Administrative Justice Court of Iran, legal entities are required to obtain a license from the Bar Association or the Judicial Advisory Center for Legal Affairs from now on if the wish to engage in providing legal services.
According to the former circular of director-general of Company Registration Office, there was no need for legal entities to obtain a license from mentioned institution. This circular was misused for the registration of legal entities without the presence of an attorney or a legal counsel paves the way for the involvement of non-specialized persons and will bring harm to the public.
The legal basis for this verdict is to protect people’s rights and to exercise their rights to be consulted by persons who are specialized in this matter.
According to article 141 of the Iranian commercial code (1968) ” In the case of the loss of a minimum of half the company’s capital, the board of directors is bound to call an extraordinary general meeting immediately, to decide whether the company shall be wound up or shall continue its operations”. On this basis, lots of giant companies, as their financial statements show, are bankrupt. Since their cumulative losses have risen by more than half of their registered capital, Accordingly, Iran khodro and Saipa -two of the major automaker’s company in Iran- are legally considered bankrupt. However, new facilities are being offered to these companies and accordingly they may be withdrawn from article 141. According to the new bylaw recently approved by the government, automakers can update the value of their assets and thus increase their fixed capital. As capital increase through revaluation, the ratio of accumulated losses to fixed capital changes and automakers are therefore excluded from Art.141.
Iran Khodro and Saipa have already made some preparatory steps to get out of bankruptcy. In parallel, in the process of re-evaluating the assets, automakers can take advantage of their various assets, including real estate, machinery, and even long- term fixed investment. Authorized audits shall do a reevaluation of such assets. This process shall be done by a formal petition of each company to the Association of Judicial Experts and therefore, the companies do not interfere with the selection of financial experts.
In addition to the above mentioned, terms of executive bylaw approved by the government are as follow:
Pursuant to note 1 of Article 149 of the Direct Tax Act, the increase in the cost arising from the revaluation of the assets of legal entities shall not be subject to income tax due to accounting standards, and the depreciation expense resulting from the revaluation increase. Expenses are not considered taxable and are measured at the time of sale or exchange of revalued assets with the differences between the sale price and the book value without applying revaluation in calculating taxable income.
Article 10 of executive bylaw of Note 1 of Article 149 of Direct Tax Law:
Article 10: “Covering losses from the assets revaluation surplus and transferring the surplus to the profit or loss account, or distributing it in any form between the owner of the assets constitute compliance with accounting standards and is subject to income tax.
Note 1: legal entities subject to note 1 of article 149 of Direct Tax Act, within one year of asset’s revaluation shall begin legal procedure for transferring the revaluation of surplus to the capital account and record increase capital in Iran’s registration office. This surplus transferred amount shall not be subject to income tax.
It should be noted that the increase in capital from this location is only acceptable if this amount is added within one year of the revaluation and this is only possible once every five years. This limitation set force in this bylaw shall apply only to the revaluation of each category of assets separately from other categories. Therefore revaluation of different asset categories other than the aforementioned is allowed during those five years.
Iran’s Central Bank has issued a circular to the banks’ network regarding the execution of a newly enacted law with the purpose of facilitation of repayment of the debts to the banks and credit institutions.
According to this law, to support domestic production and to facilitate the clearing of debts of producers, they have an option to apply to their banks for the repayments of their debts under new conditions, if they have not paid all or part of their debts by the due date with the condition that repay their debts in cash. Accordingly, the same contract shall be the basis for calculating the debt under this Act and the amount that the debtors must pay to the bank or credit institutions shall be the principal debt amount plus the simple and non- compounded interest rate. Also, all their fines and penalties shall be discarded. We are expecting the issuance of the executive circular within the next two weeks. Ultimately those who want to use this law are required to submit their applications until March 2020.
According to the current tax regulation by the government of Iran (Direct Tax Act) Residential units located in cities -which are identified as “Unoccupied” based on the information derived from the National Database of Real Estates and Housing of the Direct Act- shall be subject to the rental income tax.
Recently the government has taken steps for the activation of the National Database and this move shows that the government is eager to receive this kind of tax from unoccupied houses and apartments.Calculation of such tax is based on following formula:
– For the second year: an amount equivalent to one-half of the due tax of the Properties Schedule;
– For the third year: an amount equal to the due tax of the Properties Schedule; and
– For the fourth year onward: an amount equivalent to 1.5 times the due tax of the Properties Schedule.
The Iranian government is planning on launching this National Database by the end of the current Iranian calendar year (March 19, 2020). It is estimated that there are more than 2.6 million empty homes, a figure which is three times more than the global average.
During two days meeting in Dec 2019, a memorandum of understanding (MOU) on economic, trade, scientific, and cultural cooperation between Iran and Kyrgyzstan was signed by road ministers of two countries.
One of the significant articles of this MOU is the capacity of cooperation between Iran and Eurasia union and is to highlight the grounds of promotion of regional interactions. Also, both sides have agreed to use the potential of Anzali Free Zone to create a transportation corridor to the Persian Gulf markets and Turkey. Anzali Free Trade Zone is well known as the economic hub of Iran in the southern part of the Caspian Sea and it is located in Gilan province.
The assistance of the governments for preparing the ground in engineering services in the field of export as well as establishing a joint trade council involving Iran and Kyrgyzstan free zones and holding industrial tours for the two countries’ investment to get familiarized with free zones are among the other clauses of the MOU. Moreover, facilitating the issuance of visas, in particular for people in business, holding international exhibitions, and establishing direct flights between the two countries were among the areas agreed at the meeting of two countries.
In late July, the government of Iran approved cryptocurrency mining as an industrial activity and announced that cryptocurrency miners should acquire necessary licenses from Industry, Mining, and Trade Ministry. Recently, Iran government announced a new electricity tariff for cryptocurrency mining operations. According to the new guideline, mining digital currency is banned during peak hours, which usually extends over 300 hours in the four months of high electricity consumption across Iran mostly due to the warm weather.
The rates of electricity for mining is issued by the government in Nov 2019. During non-peak hours of these four months, miners can continue their operations and will be charged $0.16 per kWh for each kWh consumed. For the remaining cold 8 months of the year, around $0.04 per kWh will be charged to miners.
Additionally, the government has offered an incentive to those who would set up their own power plants for mining digital currencies, adding if a failure occurs to generate electricity from renewable sources, the government would back-up these plants; taking into consideration that the government will also offer various bounties in different sections of this field.