Iraq Tax Guide for Foreign Companies

Guide Contents

Corporate Income Tax: Rates and Scope · Payroll and Personal Income Tax · Withholding and Contract Reconciliation · Indirect Taxes, Customs and Sales Taxes · Taxable Presence and Other Transactions · Records, Assessments and Clearance · Discuss an Iraq Tax Matter · Related services and reading

IRAQ INSIGHT · Updated October 2026

Corporate income tax, oil-sector treatment, withholding and compliance

Iraq tax compliance connects company registration, contract classification, accounting records, annual returns, payroll and authority examination. This guide is general information, not legal or tax advice. A company-specific position requires the relevant contracts, records, applicable jurisdiction and current official instructions.

Corporate Income Tax: Rates and Scope

The standard corporate income-tax rate is generally 15%. Law No. 19 of 2010 provides a 35% rate for specified foreign oil-company and contracting activities within its scope. An oilfield connection alone does not establish that every contract is taxed at 35%.

Review the activity, contracting chain, applicable legislation and assessment approach. The authority may examine records and use deemed assessment practices; exposure should not be assumed to equal the financial statements without reviewing the file. Annual corporate returns are generally due by 31 May following the tax year, subject to applicable rules and notices.

Payroll and Personal Income Tax

Employers should review taxable remuneration, allowable exemptions, payroll withholding, remittance and annual reporting. Iraqi personal income-tax rates are progressive, generally up to 15%. Worker status, location and applicable jurisdiction affect the analysis. Keep employee records and payment evidence connected to payroll and social-security schedules.

Withholding and Contract Reconciliation

Tax retentions and withholding arrangements depend on payment type, contract, payer obligations and applicable rules. Determine whether sums are deposits against a later assessment or a final liability before modelling cash flow. Reconcile withheld amounts to payment certificates, contracts, deposit evidence and the tax file; avoid applying a single percentage to all contracts.

Indirect Taxes, Customs and Sales Taxes

Iraq does not generally operate a broad-based VAT system. Specific sales taxes, customs duties, fees and sector-specific charges may apply. Review the product, service, import route and jurisdiction instead of treating VAT filing as a routine obligation for every Iraq company.

Taxable Presence and Other Transactions

Assess Iraq taxable presence from the work performed, place of business, registration, contractual arrangements and applicable law, including permanent-establishment questions where relevant. Offshore invoicing or payment alone does not resolve exposure. Asset disposals, financing, cross-border payments and changes in structure may create additional issues; review the transaction before deciding deductions or withholding treatment.

Records, Assessments and Clearance

Maintain contracts, invoices, bank evidence, payroll records, withholding deposits, returns and assessment correspondence. Track whether each year is filed, assessed, examined or unresolved. Filing and payment should not be treated as proof that all examination or clearance requirements have been completed.

Read Filed Is Not Final: Subsequent Tax Audit

Discuss an Iraq Tax Matter

ASHUR supports annual compliance, contract analysis, withholding reconciliation, historical-account reconstruction, subsequent audits and assessment-response preparation. Bring the contracts, financial statements, returns and authority correspondence available for the file.

General guidance reviewed October 2026. Key references: Income Tax Law No. 113 of 1982, Law No. 19 of 2010 and applicable General Commission for Taxes rules and notices. Current procedures and company-specific facts should be verified before action.

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Discuss an Iraq Tax Requirement

Iraq Tax Guide