Tax Topics: The General Commission for Taxes is part of the Ministry of Finance and is in charge of administering the following tax laws:
Income Tax Law #113 of 1982 as amended.
Real Estate Rental Tax Law #162 of 1952 as amended.
Vacant Land Tax Law #26 of 1962 as amended.
Sales Tax Law #36 of 1997 (for hotels and restaurants).
Real Estate Transfer Tax (Resolution 120 of 2002).
Since foreign companies are not allowed to own Real Estate in Iraq, they can only focus on the Income Tax Law provisions.
Foreign companies that are registered in Iraq or otherwise have a permanent establishment in Iraq are subject to corporate income tax at a flat rate of 15% on their income earned in Iraq. Income earned from contracts as defined per CPA Order 17 as amended and in the connection with work performed under special agreements, such as "Agreement for Economical and Technical Cooperation between the USA and Iraq" are exempted from tax.
An employee or official earning salary, wages, and fringe benefits is subject to Wage Withholding Tax. Any person or entity paying such a salary, wages, and fringe benefits must deduct and remit the Wage Withholding Tax to the General Commission for Taxes in a timely manner.
For more information on the Iraqi Income Tax System, visit the website of General Commission for Taxes at www.iraqtax.org