Tax for Self-Employed Professionals in Iran: Doctors, Lawyers and POS Rules

If you run a clinic, a law office or any business in your own name rather than through a company, your tax file follows a different set of rules. This note is for self-employed professionals in Iran, particularly doctors and lawyers: which group you fall into, what records you must keep, what is deducted before the money reaches you, and where these files run into trouble.

The framework for individuals

Income earned by an individual from professional activity is assessed under the business income chapter of the Direct Taxes Act. Three differences from company taxation matter most.

• The rate is progressive, not flat. Instead of the 25% corporate rate, taxable business income of individuals is charged under Article 131 at fifteen, twenty and twenty-five percent across bands.
• There is an annual exemption. Article 101 exempts a slice of annual income up to a ceiling set each year, but only if the return is filed on time.
• The deadline is different. Individual returns are due by the end of Khordad (around 21 June), not four months after year end as for companies.

The three groups and what each must keep

The Article 95 regulations sort businesses into three groups by prior-year turnover and activity type. Thresholds are revised periodically, so check the current notice, but the logic is stable.

The point that matters here: doctors, lawyers, notaries and certain specialist professions are assigned to higher groups by activity type, regardless of income. You cannot argue your way into lighter bookkeeping because turnover is modest.

The Article 100 note route for small practices

If annual sales of goods and services fall under the ceiling announced each year, you may use the Note to Article 100 form and accept a lump-sum assessment instead of a full return. It suits many small clinics and new offices, but it is not automatically the better deal: in a high-cost or loss-making year the fixed amount can exceed your real liability. When it fits and when it does not is set out in the Article 100 note analysis.

Card readers: where most of these files start

The Store Terminals and Taxpayer System Act links every POS device and online payment gateway to a tax file. Three practical duties follow.

1. Every terminal must be linked to the correct owner's tax file and place of business.
2. Professional income should arrive through that linked channel, not through personal accounts or card-to-card transfers.
3. For medical practitioners, holding a linked terminal is an explicit statutory requirement, and budget laws have tied penalties and loss of exemptions to failure.

In the files I have handled, the sharpest disputes come not from denying income but from mixing personal and professional banking. A physician whose rent, family spending and clinic receipts all run through one account has no structural defence against an aggregated transaction report. See bank transactions and tax and the taxpayer system guide.

Duties specific to doctors

Two mechanisms apply beyond the general rules.

Advance deduction by medical centres. Under provisions repeatedly renewed in recent budget laws, hospitals, clinics and diagnostic centres must deduct a percentage of the fees they pay physicians and remit it. This is an advance payment, not a final tax: it is credited against the annual liability and refundable if it exceeds the amount due. Rate and scope are revisited annually, so confirm the current basis.

Multiple income streams. A doctor drawing a public-sector salary, taking fees from a private hospital and running a private practice has three income types under three mechanisms. Salary settles separately under payroll rules, while practice income and professional fees consolidate in the business file; losing that distinction is the most common cause of mismatches with the system's data.

Duties specific to lawyers

Alongside the annual return, attorneys must affix tax stamps on legal fees under Article 103. In practice:

• The stamp is affixed before the power of attorney is submitted to the court; doing it later creates problems.
• The amount is based on the fee agreed in the engagement, subject in some proceedings to the statutory tariff as a floor.
• The duty paid counts as an advance for that year and must be claimed in the return, so keeping receipts is a real filing discipline.

Deductible costs

Three conditions govern deductibility: the cost relates to earning that professional income, it is properly documented, and it is within reasonable limits. Practice rent, staff salaries and insurance, equipment depreciation, consumables, professional dues, indemnity insurance and relevant specialist training generally pass. Household costs, a private car with no documented professional use, and undocumented cash payments do not.

A seven-step check before the deadline

1. Determine your group under the Article 95 regulations and keep the matching records.
2. Separate the professional bank account from the personal one and route all receipts through it.
3. Verify that every POS device and gateway is linked to your own tax file.
4. Collect advance-deduction certificates and stamp receipts in one file.
5. Support costs with proper invoices rather than handwritten notes.
6. Reconcile declared income against terminal data and issued invoices.
7. File before the deadline even in a year with no tax payable.

Key takeaways

• Individual business tax is progressive, and the Article 101 exemption depends on filing on time.
• Doctors and lawyers sit in higher Article 95 groups by activity, whatever their turnover.
• Advance deductions by medical centres and Article 103 stamps are credits, not final settlements.
• Linking terminals to the correct file and separating personal banking prevents most disputes.
• Documentation is built through the year, not assembled in the filing month.