The tax directive related to stock exchange offices was annulled

According to Tejaratnews, the subject of the application of Circular No. 177/97 / 200-28 / 12/1397 of the National Tax Affairs Organization on the inclusion of income tax in cases of declaration of market value or net sales value in the offices of the companies listed on the stock exchange or authorized markets A similar case was heard in the Court of Administrative Justice.

In this case, the plaintiff, according to the petition for annulment of Circular No. 177, 97, 200-28, 12, 1397, has requested the Tax Affairs Organization of the country and in order to explain the request, has stated that: The Tax Affairs Organization has violated Article 51 of the Law in the said circular. The Constitution and the Law on Direct Taxes, including the repeated Articles 143 and 143 of the Law on Direct Taxes, have imposed taxes and created a new tax source outside their competence and authority, and then demanded a tax based on their own source, and openly exempted from tax. Note 1 Article 143 of the Law on Direct Taxes on the income from current investments in the stock market has been repeatedly ignored.

It should be noted that investment companies and investors active in the stock market earn money and profits by buying and selling shares of listed companies. These companies first buy shares and then sell the same shares, and their income after the sale of shares is realized from the difference between the price of the day of purchase of shares or the price of the day of sale of shares, of course, according to Article 143 of the law Income or VAT or any other type of tax is exempt. Therefore, first: no income is realized from the place until the purchased shares are sold. Second: Even if the income is realized, that income is exempt from tax. Even if the shares purchased were not held, but sold and generated income from their sale, according to the law, such income is exempt from tax and, naturally, income from the increase in the value of shares is not taxed in the first place. When the principle of such income is tax-exempt, what does it mean for the tax administration to consider the difference in the value of tax shares? How can the tax administration consider the net increase in investment as income and tax it while using the word “investment” in the same directive, and according to commercial principles and customs, not all investments necessarily lead to profitability? Rather, the investment may lead to a loss, especially in the case of stock market and stock market investments, so it is not possible to identify and tax a profit until the return on investment is finalized. On the other hand, even assuming the realization of profits for investments resulting from stocks, the principle is that the profits from investments in the stock exchange are not taxed. Therefore, investing in the purchase of shares of listed companies is not subject to tax, both negatively (non-realization of profit on investment only) and positively: (tax exemption on income from investing in the purchase and sale of shares).

The plaintiff, in accordance with the supplementary bill registered with the Secretariat of the General Assembly of the Court of Administrative Justice under No. 1400-9001473-9: 1414, stated that: “Do they show stock prices (investment profits) in their financial statements at the end of their fiscal year?” In response, as specified in the meeting; Profit from stock price increases is not shown as a definitive profit in the financial statements at the end of the year, but according to the accounting standards that stock exchange companies and many other companies are required to comply with. However, the determination of a definite profit will depend on the sale of shares. Loss sold is shown as a loss, so it is clear that such investments will not be recognized as a definitive return until they are sold and converted to liquidity, and their presentation in the financial statements at the end of the year is not a definite return and only To clarify financial documents and inform shareholders.

In explaining the problem that arises from the challenged directive, it should be noted that the tax administration collects taxes on shares that have not been sold based on this directive, in other words, a company buys a stock and, for example, keeps it for 5 years. However, the Tax Administration, for example, refers to the company in the second year and collects taxes from the daily stock price, which is increased. They know, and they happen to do the same next year, and they are taxed again for the increased amount, but the company loses at the time of the sale of the shares it has taxed. Of course, with the explanations mentioned in the next paragraph, it will be clear that the citation of the recent ruling of the Administrative Court of Justice regarding the admissibility of losses arising from current investments as expenses has nothing to do with my complaint and basically the issue My complaint is two different things.

General Board vote

The General Assembly of the Administrative Justice Court was chaired by the Judicial Deputy of the Administrative Justice Court in the affairs of the General Assembly and with the presence of the deputies of the Administrative Justice Court and the heads, advisors and judges of the Court branches. Is.

Pursuant to Article 143 of the Law on Direct Taxes and its notes on the shares of listed companies and Article 143 of the said law and its notes on the transfer of shares and the preemptive right of shares of companies on the stock exchange or OTC markets with a fixed rate. The tax lump sum has been determined and it has been specified that: “For this reason, no other amount will be claimed as tax on stock transfer income and the right of priority of shares and VAT on buying and selling” and the tax claim subject to Circular No. 177. 97,200-28, 12 ؍ 1397 In addition to the flat tax subject to Articles 143 and 143 of the Law on Direct Taxes, the Tax Affairs Organization of the country determines the obligation to pay double tax, while the Tax Affairs Organization according to the ruling Article 51 of the Constitution of the Islamic Republic of Iran does not have the legal authority to demand taxes in addition to what is stated in the law.

According to the above, the application of the Circular No. 177.97 ۰۰200-28. 12 ؍ 1397 of the National Tax Affairs Organization on the inclusion of income tax in cases of declaration of market value or net sales value in the offices of the listed companies of listed companies or authorized markets Similar (subject to repeated Articles 143 and 143) is contrary to Article 51 of the Constitution of the Islamic Republic of Iran and repeated Articles 143 and 143 of the Law on Direct and Out-of-Authority Taxes and is documented in paragraph 1 of Article 12 and Article 88 of the Law on Organization and Procedure. The trial of the Administrative Justice Court approved in 1392 will be annulled.

Source: stamp