Iraqi & UAE Tax Laws and Regulations
A comprehensive reference to the key legislation governing taxation in Iraq and the UAE — updated to reflect the current regulatory landscape.
Income Tax Law No. 113 of 1982
The principal statute governing personal and corporate income tax in Iraq, including residency rules, taxable income, deductions, and the graduated rate schedule.
CPA Order No. 49 of 2004
Coalition Provisional Authority order amending ITL 113/1982, introducing a flat 15% CIT rate for companies and removing prior progressive brackets for legal entities.
Social Security Instructions No. 1 of 2007
Governing employer and employee Social Security contribution rates, registration obligations, and payroll withholding procedures applicable to entities operating in Iraq.
Investment Law No. 13 of 2006
Establishes the National Investment Commission and provides tax holidays, import duty exemptions, and land-use rights for approved foreign and domestic investment projects.
Taxation of IOCs — Licensing Round Framework
International Oil Companies operating under Iraq licensing rounds are subject to a fixed 35% income tax, specific ring-fencing rules, and remittance profit arrangements.
Iraqi Customs Tariff Law No. 22 of 2010
Governs import duties, customs valuation methods, and tariff classification in Iraq. Applies the Harmonized System (HS) coding and provides exemptions for qualifying projects.
UAE Corporate Tax Law — Federal Decree No. 47 of 2022
Introduces a 9% federal CIT on taxable income exceeding AED 375,000, effective for financial years starting on or after 1 June 2023. Includes a 0% rate for Qualifying Free Zone Persons.
UAE Value Added Tax — Federal Decree No. 8 of 2017
Establishes the UAE's 5% VAT system, effective January 2018. Covers registration thresholds (AED 375,000), zero-rated and exempt categories, input tax recovery, and filing obligations.
Common Questions
Frequently Asked Questions About Iraqi Tax
The standard corporate income tax rate in Iraq is 15% on taxable profits for most companies. Certain sectors, such as foreign oil and gas companies operating under production-sharing or risk-service contracts, are subject to higher rates (commonly 35%) as specified in their contractual arrangements.
Yes. Iraq levies a progressive personal income tax on individuals, with rates ranging from 5% up to 15% for the highest bracket. Salaries and wages are subject to withholding by the employer, who remits the tax to the General Commission for Taxes (GCT).
Iraq applies a retention (withholding) tax on payments to contractors and suppliers. The standard rate is 3% for companies and 5% for individuals on the gross payment, deducted at source by the paying entity and remitted to the tax authority.
Foreign companies carrying on business or earning income in Iraq are generally subject to Iraqi corporate income tax. Those without a permanent establishment may still face withholding taxes on payments such as royalties, technical service fees, and interest, depending on the nature of the income and any applicable arrangements.
No. Iraq does not currently impose a VAT or sales tax in the conventional sense. However, certain goods and services are subject to customs duties and excise-style levies. Businesses should monitor regulatory developments, as indirect tax reform remains under discussion.
Corporate taxpayers must file an annual income tax return within a set period following the end of the financial year (commonly within four months of year-end), along with any balance of tax due. Quarterly advance payments are typically required based on the prior year's liability.
Late filing and late payment carry penalties under Iraqi tax law, typically calculated as a percentage of the unpaid tax accruing over time. Repeated non-compliance can lead to additional enforcement measures, so timely filing and payment are strongly advised.
Yes. Taxpayers who disagree with an assessment issued by the General Commission for Taxes may file an objection and pursue review through the tax dispute resolution process, including appeal to the tax committees and, where applicable, the courts.
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