Is Q Tax kept up to date with Iraqi law?
Yes. The engine is maintained by our own tax team against Income Tax Law No. 113 of 1982 as amended, CPA Order No. 49 of 2004 and the current GCT instructions and circulars. When rates or allowances change, the platform changes with them.
Does it cover the Kurdistan Region?
Yes. Federal and Kurdistan Region rules differ in allowances and practice; Q Tax applies the correct regime based on where the employee or entity is registered.
What is the in-app settlement service?
From inside the platform you can instruct our settlement team, who submit your settlement request to the tax authority and attend on your behalf, targeting settlement within three business days of a complete submission.
Is my data secure?
All data is encrypted in transit and at rest, stored in secure cloud infrastructure, and governed by our Terms of Use and Privacy Policy drafted in line with Iraqi law.
Can I use Q Tax in Arabic?
The entire platform, calculators, reports, calendar and the AI adviser, is available in both English and Arabic.
What is the corporate income tax rate in Iraq?
The standard Iraq CIT rate is 15% under CPA Order No. 49 of 2004; income from oil and gas contracts is taxed at 35% under Law No. 19 of 2010. Q Tax applies the correct regime automatically based on your activity.
How does withholding tax (WHT) work in Iraq?
Iraq applies tax retentions on contract payments at rates that vary by sector and contract type, with the highest retention rates applying in the oil and gas sector under the GCT instructions. Q Tax computes WHT contract by contract at your applicable rate.
Do foreign companies need to register for tax in Iraq?
Yes. Foreign companies and contractors doing business in Iraq generally must register with the General Commission for Taxes, obtain a tax number and file annual returns, and the requirements differ between federal Iraq and the Kurdistan Region. Our team handles tax registration for foreign contractors end to end.
What are Iraq's main tax deadlines and penalties?
Corporate returns for calendar-year taxpayers are generally due by 31 May, and late filing triggers penalties and interest that accrue by the day. The Q Tax tax calendar tracks every Iraq tax deadline and the penalty module quantifies exposure instantly.
Does Iraq have double tax treaties?
Iraq's treaty network is limited but relevant, including arrangements with several Arab states. Whether relief is available depends on the treaty text and GCT practice; our advisers assess treaty positions as part of structuring for inbound investors.
What is the corporate income tax rate in Iraq?
The standard corporate income tax (CIT) rate is a flat 15% of taxable income under Income Tax Law No. 113 of 1982, as amended. A special rate of 35% applies to income from contracts and subcontracts connected with oil and gas production and related industries, pursuant to Law No. 19 of 2010. There is no separate capital gains tax regime, gains are generally taxed as ordinary income.
Does Iraq have VAT?
No. Iraq has not introduced a VAT system. Instead, a sales tax applies to specific goods and services, for example, mobile recharge cards and internet services (20%), first-class hotels and restaurants (10%), and excise-type rates on cars, alcohol and tobacco. Businesses outside these categories generally have no indirect tax filing obligations.
When does a foreign company become taxable in Iraq?
Iraq applies a source-based system: income 'arising in Iraq' is taxable in Iraq, regardless of whether the foreign company has a registered presence. Work physically performed in Iraq, services, construction, supply-and-install contracts, is treated as Iraqi-source income. Pure offshore supply of goods is generally outside the net, but mixed contracts should be carefully split, as the GCT may otherwise assess the entire contract value. Iraq's double tax treaty network is very limited, so treaty relief is rarely available.
What are the withholding and retention obligations on contracts?
Under Instructions No. 2 of 2008 (as amended), Iraqi ministries, state entities and companies contracting with non-resident or unregistered contractors must retain a percentage of each payment as an advance against the contractor's final tax liability. Rates vary by sector, commonly 1.8% to 3.3% of the gross contract value, with oil and gas contracts at the top of the range. These retentions are not a final tax: they are creditable against the tax assessed on final settlement, and release of retained amounts typically requires a tax clearance.
How is taxable income assessed in practice?
Two routes. If the taxpayer maintains audited accounts in accordance with the Iraqi Unified Accounting System and the GCT accepts them, tax is assessed on actual profit. Where books are not maintained, not accepted, or the taxpayer is a non-resident contractor, the GCT commonly applies a deemed profit assessment, applying a presumed profit margin (which varies by activity) to gross Iraqi-source revenue, then taxing that deemed profit at 15% (or 35% for oil and gas). Foreign contractors should model both scenarios before pricing an Iraqi contract.
What are the personal income tax rates?
Federal Iraq applies progressive rates of 3%, 5%, 10% and 15% on employment and other personal income, after statutory personal allowances (for the taxpayer, a non-working spouse, children and other categories). Employers are required to withhold PIT from salaries and remit it to the GCT, direct payroll compliance is the employer's legal responsibility, and this is one of the most commonly audited areas.
Is the Kurdistan Region different?
Yes, materially. The Kurdistan Regional Government applies its own practice: employment income is taxed at a flat 5% after a monthly exemption of IQD 1,000,000, and the region has its own tax administration and social security offices. Employers with staff in both federal Iraq and the Kurdistan Region must run separate payroll compliance streams and be careful about which authority has jurisdiction over each employee, usually driven by the work location.
What are the social security obligations?
Under the Social Security Law (Law No. 39 of 1971, as amended by the Retirement and Social Security Law No. 18 of 2023), contributions are generally 5% employee and 12% employer on salary, with the employer rate rising to 25% in the oil and gas sector. Registration with the social security department is mandatory for employers, and foreign employees are generally within scope unless a specific exemption applies. Social security clearance is, like tax clearance, a practical precondition to closing out contracts and releasing final payments.
What are the filing deadlines?
Corporate taxpayers must file their annual income tax return with the GCT by 31 May following the financial year end (the Iraqi tax year is the calendar year). Employers settle annual payroll PIT reconciliations alongside their monthly/quarterly withholding remittances. Late filing and late payment attract additional tax of 5% of the amount due, doubled to 10% if the delay exceeds 21 days, plus exposure to estimated assessments.
What is a tax clearance certificate and why does everyone ask for it?
A tax clearance (براءة ذمة) is the GCT's confirmation that a taxpayer has no outstanding liabilities. In Iraqi practice it functions as the gatekeeper document: government entities and major counterparties will not release final payments or retained amounts, close contracts, or in some cases renew registrations without it. Obtaining clearance requires completing assessments for all open years, which is why we always advise clients to keep filings current rather than attempting a multi-year regularisation at contract close-out.
Are there tax incentives for investors?
Yes. Projects licensed under the Investment Law No. 13 of 2006 may benefit from a 10-year exemption from taxes and fees (extendable), plus customs duty exemptions on imported assets. Separately, entities operating in Iraqi free zones under the Free Zones Law No. 3 of 1998 enjoy exemption from taxes on activities conducted within the zone. Neither regime is automatic, the exemption follows the licence, and its scope should be confirmed before relying on it in financial models.
Can a foreign company just invoice from abroad and avoid registration?
This is the most common, and most expensive, misconception. If the work is performed in Iraq, the income is Iraqi-source and taxable, and the Iraqi counterparty will typically retain amounts from payments and require tax clearance before final settlement. Operating unregistered does not remove the liability; it simply converts it into retained cash, penalties, and a deemed assessment at the end of the project. The correct approach is to structure and register before contract signature, branch, LLC, or subcontract structure depending on the project, and price the tax cost into the bid.