From 1 Dey 1404 (Dec 22, 2025), paper & non‑system invoices will no longer create input VAT credit in Iran

What exactly changes on 1 Dey 1404?

After the effective date, the VAT return calculation will only recognize purchase VAT (input VAT credit) when the supporting invoice is an electronic invoice properly registered in Samane Moadian. If your purchase is documented only by a printed or non‑system invoice, the VAT you paid on that purchase can become an additional cost rather than a recoverable credit.

Why this matters

• VAT is designed to allow businesses to offset VAT paid on purchases against VAT collected on sales.
• If the “purchase side” is not properly registered, the offset is denied and your VAT payable increases.
• This also impacts pricing, cash‑flow planning, and supplier selection (especially for B2B procurement).

Important nuance

Many businesses confuse VAT input credit with corporate income tax (CIT) expense deductibility. The 1 Dey 1404 rule is primarily about VAT credit. The rules and timelines for CIT deductibility can differ and may come with separate transition periods and conditions. Treat these as two different compliance topics.

Legal basis (Budget Law 1404 and related laws)

This requirement is grounded in Clause (gh) of Note (1) in Iran’s Budget Law for 1404 and is reinforced by the Law on Point‑of‑Sale Terminals & the Taxpayers System (Samane Moadian) and the Law on Facilitating Taxpayers’ Obligations. Together, these rules are designed to phase out non‑transparent purchase documents and move VAT reporting toward a fully data‑driven, system‑verified model.

CIT deductible expenses: a separate transition timeline to track

VAT input credit and corporate income tax (CIT) deductible expenses are not the same compliance test. The 1 Dey 1404 rule is primarily about VAT credit.

For CIT expense deductibility, a separate transitional rule has been referenced: non‑electronic invoices that include the buyer’s identifying details may remain acceptable as supporting documents (subject to applicable regulations) for 20 months after the Speculation & Scalping Tax Law becomes effective.

Based on the commonly cited dates: the Speculation & Scalping Tax Law was published in the Official Gazette on 28 Mordad 1404 (Aug 19, 2025) and became effective on 13 Shahrivar 1404 (Sep 4, 2025). Twenty months after that effective date lands on 7 Ordibehesht 1406 (Apr 27, 2027).

What counts as a “paper / non‑system” invoice?

In simple terms, a “non‑system” invoice is any invoice that is not issued and registered through the official e‑invoicing workflow of Samane Moadian (either directly by the seller or via a licensed trusted service provider).

Common examples

• Printed invoices (including pre‑printed invoice books), handwritten invoices, and “manual” receipts that never get registered.
• Invoices issued in accounting software but not submitted to Samane Moadian.
• Documents that lack the required electronic identifiers/registration record in the Taxpayers System.

What you should request from suppliers

• An e‑invoice that is registered in Samane Moadian.
• Supplier cooperation to share invoice references/identifiers so you can verify them in your portfolio.
• Consistent invoicing processes (especially for recurring procurement).

Who is affected and what are the risks?

This change impacts any business that relies on purchase VAT credit in its VAT return — particularly businesses with material procurement, B2B service spend, and supply chains where vendors still issue paper invoices.

Key risks

• Higher VAT payable: you may lose the ability to offset VAT paid on purchases.
• Audit friction: mismatched documentation between buyer claims and system‑registered invoices increases scrutiny.
• Supplier dependency: if a supplier cannot issue compliant e‑invoices, you may need to switch vendors or renegotiate.
• Cash‑flow impact: unrecoverable VAT becomes a direct cost until processes are fixed.

When will the impact become visible?

Some taxpayers assume the deadline might be extended, but the Tax Administration’s communications around this measure treat the date as fixed. In practice, the change becomes very visible when you prepare and file VAT returns that include transactions after the effective date.

For many businesses, the “aha moment” comes when filing the VAT return for Winter 1404 (transactions in Dey–Esfand 1404), typically submitted in Ordibehesht 1405 (around late April–May 2026). By then, the VAT return workflow is expected to remove (or system‑block) fields that previously allowed input VAT claims based on paper/off‑system purchase documents — meaning the system will prevent registering those credits in the first place.

Readiness checklist (before the end of Azar 1404)

The safest approach is to treat this as a procurement‑and‑controls project, not only a finance task. Here is a practical checklist to implement before the effective date:

1) Vendor & procurement controls

• Update purchase order terms: “VAT credit requires an e‑invoice registered in Samane Moadian.”
• Create a supplier compliance list: which vendors can issue e‑invoices and which cannot.
• Train purchasing teams to reject non‑compliant invoices (or route them for escalation).

2) Internal systems & workflow

• Ensure your organization’s Taxpayers System access (portfolio/carpoosheh) is active and monitored.
• Assign an owner for e‑invoice verification and exception handling.
• Integrate accounting processes with the e‑invoice flow (direct integration or via a trusted provider).

3) Reporting & governance

• Set up monthly checks: “% of purchases backed by registered e‑invoices”.
• Maintain a dispute log for suppliers who fail to register invoices on time.
• Plan for peak periods (year‑end procurement) to avoid last‑minute compliance gaps.

Note: This article is general information. For binding guidance, always follow the latest official announcements and your specific taxpayer status.

FAQ

Need help implementing e‑invoicing controls?

If you want, we can help you map the impacted purchase flows, assess supplier readiness, and set up a practical compliance checklist so VAT credit is protected after 1 Dey 1404.

Contact us to discuss your setup.