A company registered in Iraq is subject to income tax at rates that depend on its activity and contracts, while oil and gas companies will pay rates from 15 to 35 per cent. Also, it is necessary to register the business with the General Tax Commission (GTC) and open a file with the help of any reputable Legal Tax Advisors to pay taxes.

However, in the case of an Iraqi non-profit organization, there are some additional regulations. Such organizations are exempt from taxes if they can establish that their activities in Iraq are not profit-making and are useful for the community. In that case, such a document or letter can be obtained from the NGO Directorate in order to enjoy tax exemption benefits. It is advisable to seek assistance from the Legal Tax Advisors to do the procedures correctly and conveniently.

Corporate Income Taxes

No matter where the recipient resides, all income derived from Iraq will be subject to tax in Iraq. In Iraq, any company registering as an entity is subject to income tax based on the company’s activity and contracts. For oil and gas companies, the income tax percentage rate ranges from 15 to 35 per cent.

The company must be registered with the General Tax Commission (GTC) and open a file with the GTC in order to pay taxes. Any organization registered in Iraq is exempt from paying taxes if they can prove that their activities are not aimed at making profits and for the community. This letter is obtained from the NGO Directorate in Iraq.

VAT for each type of service varies from 5 per cent to 300 per cent according to the category to which it belongs. For goods and services, the VAT imposed is five per cent, for mobile and internet services it is 20 per cent. While for alcohol and tobacco it is 300%. Along with that, cars and airline tickets hold a VAT of 15 per cent. The detailed percentage of each and every service can be found with the help of the best Legal Tax Advisors of GHI Legal.

Personal Income Taxes

In Iraq, all income earned within Iraq is taxable, regardless of the recipient’s residence. Generally, an employer usually handles the process of paying Personal Income Tax (PIT) for an employee by completing all necessary deductions, such as income taxes, public health insurance, and social security, and the employee receives their net salary.

For an easy and convenient process, it is always the best choice to seek guidance and help from a reputed legal firm like GHI Legal. With a long history of successful business, they are equipped with top lawyers in Iraq as well as UK lawyers in Dubai.

Accounting and Tax Considerations

Withholding Taxes or Capital Gains Taxes

• In the case of dividends and royalties, they are not subject to withholding taxes. However, according to the Legal Services in Iraq, Iraqi companies that make interest payments to a non-Iraqi company will be taxed at 15%.

• Selling depreciable assets will result in a 15% capital gains tax. On the other hand, tax-free gains may be derived from the sale of stocks and bonds that do not result from trading activity.

For all the necessary information related to your tax payments and the process of paying them can be perfectly handled with the help of Legal Tax Advisors from a reputable legal firm like GHI Legal.

Social Security Tax

The social security contributions made by employers in Iraq range between 12 and 25 per cent. Contributions are deducted from the gross salary and benefits an employee receives each month. Housing and transportation are deducted from the gross salary and benefits before the contributions. The social security contributions hold a total of 5 per cent of an individual’s net salary. However, expats have the option of excluding themselves from social security contributions.

Tax Reporting, Accounting and Auditing Considerations

GHI Legal is one of the leading legal firms which are equipped with the finest Legal Tax Advisors who are willing to offer any and all Legal Services in Iraq. Our services are not only limited in Iraq but also to other places since we are equipped with the best UK Lawyers in Iraq. Our experience and expertise guarantee to have a successful outcome and stress-free process for every client of theirs.

• All Iraqi companies pay taxes following a calendar year that begins on January 1st and ends on December 31st.

• An audited financial statement and a corporate income tax return are required for all Iraqi resident companies.

If you are unsure about your tax payments, what, when, or how to make them, you’re not alone. You should always seek the assistance of the best legal firm that can help and guide you through each and every step along the way. The expert team at GHI Legal and their top UK Lawyer in Dubai can help you with all your tax payment issues. In addition, they will provide all the information you require as well.

Contact us to know more..