Corporate Tax in Iraq: 15% and 35% in Context

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By ASHUR International · Evergreen guide · Updated October 2026

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Start with the Contract and Activity · Standard Rate and Defined Oil-Contract Regime · Iraq Taxable Presence · Taxable Profit and Assessment Practice · Review Law No. 19 of 2010 Scope · Withholding and Contract Deductions · Annual Returns and Examination · Investment Incentives Require Specific Review · Questions to Resolve Before Pricing · ASHUR Corporate Tax Support · Related services and reading

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IRAQ INSIGHT · Updated October 2026

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Contract classification, taxable presence and assessment responsibilities

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Corporate tax classification affects pricing, reporting and cash flow. Begin with the taxpayer, jurisdiction, scope of work and contractual relationships. Last updated: October 2026.

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The standard Iraqi corporate income-tax rate is generally 15%. Law No. 19 of 2010 provides a 35% regime for specified foreign oil-company contracts involving oil and gas production, extraction and related activities. The higher rate should not be applied merely because a supplier serves an oilfield customer.

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Registration, the work performed in Iraq, the contract structure and applicable rules influence taxable presence and compliance responsibilities. Offshore invoicing or payment alone does not resolve Iraq tax exposure. Review the actual operating model and evidence.

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Taxable profit requires tax adjustments to the accounts. In administrative practice, deemed-profit assessments may also be relevant. Reconcile contract revenue, costs, bank receipts, retentions, payroll and supporting documents; identify the basis used in each assessment.

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Examine the original contract, parties, work scope and applicable instructions before determining whether the defined regime applies. Review related service and subcontract arrangements on their facts. Keep any unresolved classification issue visible before agreeing a commercial price.

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Different contract-payment mechanisms may involve withholding or tax retention. A percentage deducted from gross contract value is not necessarily the statutory income-tax rate. Establish the instruction, taxable basis, remittance evidence and treatment in the final assessment.

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Annual corporate returns are generally due by 31 May following the tax year, subject to applicable instructions and extensions. Maintain separate records of filing, assessment, examination, payment and clearance. A filed return does not by itself establish that a historical year is resolved.

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Incentives depend on the applicable legislation, investment licence, approved activity and conditions. Do not assume that an investment project, foreign ownership or an oilfield contract automatically qualifies for an exemption.

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Which taxpayer and activity are involved? Which regime applies? What withholding or retention is expected? How will costs and intercompany charges be supported? What tax-clearance or close-out evidence will the contract require?

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ASHUR assists with contract classification, tax computations, account reconciliation, historical assessments and documentary preparation. Discuss your contract and fiscal years with info@ashuriraq.com or +964 782 532 1017. Read the Iraq Tax Guide for the broader compliance overview.

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Read the Principal Iraq Tax Guide

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Discuss Contract Tax Classification

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Tax & Tax Controversy · Accounting & Bookkeeping

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Iraq Tax Guide · Filed Is Not Final

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Discuss your Iraq tax requirement