Vehicle transfer tax refers to the tax paid when transferring ownership from one person to another. This type of tax is generally paid when buying, selling, or gifting a vehicle. It is calculated based on the fair value or sale price of the vehicle. According to experts from accounting firms, the vehicle transfer tax is paid by the seller to the tax authorities, and only after this payment can the license plate be changed.
For newly registered vehicles, when the vehicle is purchased brand new, the transfer tax must be paid. In this case, the seller, who is the vehicle manufacturer or importer, pays the tax to the tax authorities, and the buyer is usually unaware of the paid tax.
For further tax advice, you can contact tax experts at Darako Accounting Services.
Calculation of Vehicle Transfer Tax for New Cars:
The vehicle transfer tax for new cars depends on various factors, including the vehicle's value and production year. According to Darako’s tax experts, the following points should be considered:
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Value Added Tax (VAT): According to Article 30 of the Permanent Value Added Tax Law of 1400, personal vehicles and motorcycles are subject to VAT, except for some agricultural, mining, and workshop vehicles, and vessels. Therefore, the VAT for domestic vehicles is 1%, and for imported vehicles, it is 2%. It's important to note that VAT for new cars is the responsibility of the manufacturing or assembly company or the importer.
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Vehicle Transfer Tax: The transfer tax for a new vehicle is equivalent to 1% of the car's value. The type of vehicle affects this tax. For example, the newer the model of the vehicle, the higher the transfer tax. The rates for domestic and imported vehicles may differ, and older vehicles incur lower taxes.
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Luxury Cars: According to the 1402 Budget Law, luxury vehicles are also subject to taxes. Cars worth up to one billion rials are not taxed. For luxury vehicles, the tax rates are as follows:
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Up to 1.5 billion rials: 1% on the excess over 1 billion rials.
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Up to 3 billion rials: 2% on the excess over 1.5 billion rials.
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Up to 4.5 billion rials: 3% on the excess over 3 billion rials.
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Over 4.5 billion rials: 4% on the excess.
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How to Pay Vehicle Transfer Tax:
The online payment system is currently the best solution for paying vehicle transfer tax without requiring in-person visits. The following websites should be visited for the payment:
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National Tax Administration’s Vehicle Transfer Tax System: cartransfer.tax.gov.ir
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Electronic Tax Services Portal: my.tax.gov.ir
You need to log in or register to use these services. Once logged in, enter the vehicle's details to calculate the payable tax. After reviewing the tax amount, you can pay it through the available online payment gateways. After successful payment, you can receive a payment certificate, which is required for license plate exchange.
Transfer Tax in Inherited Vehicles:
When transferring a vehicle through inheritance, there are specific laws that usually apply a lower tax rate than regular sales. The tax rates may also differ by geographic region or for vehicles with lower emissions.
Final Note:
Vehicle transfer tax is a significant cost in the process of buying and selling a vehicle. It serves as both a source of income for the government and a tool for regulating the car market and controlling price fluctuations. Given the complexity of tax calculations and frequent legal changes, consulting tax experts or using online systems can help facilitate this process.