Iran Pestle

2700 Words Mar 22nd, 2011 11 Pages
1. Iran PESTLE Analysis
1.1. Political
Iran’s government structure is a combination of democracy and modern Islamic theocracy. The head of state is the Supreme Leader, who makes all the major decisions on foreign policy and has control over the armed forces. The Supreme Leader is elected by the Assembly of Experts, which consists of 86 clerics. The clerics are chosen by the Guardian Council, which consists of six jurists and six theologians elected by the Supreme Leader. The Guardian Council is one of the most influential bodies in the country’s political landscape. Iran’s Parliament consists of 290 members who are elected by the public every four years. The Parliament must have approval from the Guardian Council before passing laws. The
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* Tax
The sales tax (VAT) rate in Iran is 1.5%, income tax 35% and corporate tax 25%. Foreign companies are required to pay tax on all taxable income earned, whether through investment in direct or indirect activities (e.g. branch offices), at the flat company tax rate of 25%. Taxable corporate income on sales earned by the assignment of royalties of foreign legal entities (e.g. movie screening rights) may be between 20% and 40% of the sum total generated by the entity within the tax year (depending on the case and determined by the Guardian Council). The direct tax on the income of foreign companies transporting passengers and cargo (airlines and shipping companies) from Iran is a flat company tax rate of 5% of the sum of all revenue generated in Iran, en route and at the final destination. Foreign insurance companies are subject to a 2% tax rate of the premium earned and the interest accumulated from their deposits in the country. Corporate tax for foreign contractors in the areas of construction and installation is calculated on the basis of 12% of total annual receipts (Tax Rates CC 2011).

* Balance of payments
Iran has a surplus on its current account, which means that the country exports more than it imports. As a member of the Organisation of the Petroleum Exporting Countries (OPEC), Iran’s largest export commodity is oil (which amounted US$ 69 825 million in the 2009/2010 fiscal year). The current account surplus started to grow in the

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