The banking infrastructure in Iran has gradually developed, and the number of private banks has grown over recent decades. But banking, especially when using foreign bank accounts, has been made more difficult for expats as a result of international sanctions against Iran.
Money in Iran
The currency in Iran is the Iranian Rial (IRR), which has experienced extreme inflation. Coins are functionally worthless and rarely used in transactions. Many IRR banknote denominations have quickly devalued, and to keep up with inflation, 'Iran Cheques' are sometimes used like cash.
Expats will find that locals often refer to ‘tomans’ when talking about currency. A toman is the equivalent of 10 rials. Despite this usage, prices are usually always written in rials. For example, the sign next to an item in a shop would state the price in rials, but a shop assistant might drop a zero and refer to the price in tomans.
Banking in Iran
The Iranian banking system consists of a central bank, Bank Markazi. This bank issues currency and oversees all the other state and private banks. Several commercial banks have branches located throughout Iran.
Some expats won't be able to access international banking services, and opening a local account may be the only option for those planning on staying in Iran for anything more than a few months.
Interest rates at banks in Iran, as well as the services offered, vary greatly. It’s best to compare institutions when choosing where to bank. Factors to consider include fees, the availability of online banking, and the number of branches and ATMs available in the country.
Credit cards and ATMs
As a result of economic sanctions, it is very difficult to use foreign credit and debit cards in Iran. Those visiting Iran for a short business trip should bring enough cash to exchange for local currency. Bureaux de change can be found at the Tehran airport, most banks and hotels.
For those with a local bank account, ATMs are generally easy to find, but they can be limited outside the main urban centres.
Taxes in Iran
The tax system in Iran is complex. For this reason, most foreigners working in Iran hire a tax expert to ensure that they pay their taxes correctly. An expat’s employer may also be able to help them establish their tax liabilities.
Broadly, Iranian tax residents are charged tax on all income earned both in Iran and globally, while those not resident for tax purposes in Iran pay tax only on locally earned income. Income is taxed on a progressive scale ranging from zero to 35 percent.