Iran's CB Sets Deadline For Export Revenues Repatriation
EghtesadOnline: Companies exporting non-oil goods that fail to meet their financial commitments regarding repatriation of their overseas earnings in the previous Iranian fiscal year (March 2018-19) by the end of this month will be taken to court.
Mohmmad Lahooti, head of Iranian Export Confederation, issued the warning saying that the Central Bank of Iran has agreed to extend the deadline to January 21 "for the last time".
Companies are required to sell at least half of their export earnings in the secondary market at an exchange rate set below the higher open market price, according to Financial Tribune.
Petrochemical companies must bring back at least 60% of their earnings and sell it via the secondary foreign exchange market known as Nima (Persian acronym for Integrated Forex Deals System).
As per law, at least 20% of the total proceeds sold in the secondary forex market must be in cash. The balance can be used to import goods, machinery and equipment either by the exporting firm or any other third party.
"Most exporters have done their best to bring back the revenues despite the challenges they face. Those who fail to do so will not be eligible for tax incentives," IBENA quoted him as saying.
To encourage exporters, the Iran National Tax Administration announced tax holidays for law-abiding exporters. For example, export companies will not pay tax on their overseas income if they fulfill their currency commitments on time. INTA will also refund the value added tax to such exporters within a month from the date of repatriation.
The CBI is responsible for sending the names of exporters who uphold currency repatriation rules to INTA for the tax breaks.
However, Lahooti said only a limited number of exporters had failed to fulfill their forex commitments.
Rules related to the repatriation of export earnings became more stringent after the United Sates re-imposed economic sanctions in the spring of 2018, triggering a severe shortage of foreign currency as oil exports declined to unprecedented lows.
In the previous fiscal (March 2018-19) exporters repatriated $18.7 billion. The money was brought back to the country as per repatriation rules mandated by the CBI.
The rules include selling currency on Nima, cash transfers through hawalah, selling to the bureaux exchanges and using currency for imports.