The article examines the constitutional and legal foundations of the legal regulation of the value-added tax in the public finance system of the Islamic Republic of Iran, as well as the evolution of its inter-budgetary distribution mechanisms. Special attention is paid to the relationship between constitutional provisions, tax and budget legislation, and law enforcement practices that determine the distribution of tax revenues between the central and regional levels of public authority. It is shown that the Iranian VAT model combines elements of fiscal centralization with budget equalization mechanisms in favor of territories with lower financial resources.