Tax in Iraq

Who is the tax authority?

Iraq's General Commission for Taxes (GCT), under the Ministry of Finance, administers the federal tax system. The legal foundation is Income Tax Law No. 113 of 1982 and its successive amendments.

The Kurdistan Regional Government (KRG) in northern Iraq maintains a separate revenue service with its own collection authority and budget. Practitioners working with Iraqi entities must identify which jurisdiction applies before advising on rates or filing requirements.

Iraq is a member of the Greater Arab Free Trade Area (GAFTA) and the Arab League. It is an OPEC founding member since 1960 and holds AfCFTA observer status.

What is the tax year and when are returns due?

Iraq uses the calendar year (1 January to 31 December) as its tax year. Personal returns are due 31 May for the prior year. Wage tax is withheld monthly by employers.

Who counts as an Iraqi tax resident?

Under Income Tax Law No. 113/1982, an individual is an Iraqi tax resident if either condition applies:

• The individual maintains a registered residence in Iraq, OR
• The individual is physically present in Iraq for 183 or more days in the tax year

Iraq's system is predominantly territorial in scope — residents are primarily taxed on Iraqi-source income. Cross-border income treatment depends on applicable treaties and specific sector rules.

For KRG-registered entities or individuals working within the Kurdistan Region, the KRG revenue administration determines residency and filing obligations separately from the federal GCT.

What are the personal income tax rates?

Iraq uses four progressive brackets with relatively low nominal rates:

A personal allowance applies before the brackets. Investment income and specific categories may face separate withholding tax rates.

How does corporate tax work?

Iraq's corporate income tax splits into two tracks based on sector classification.

Withholding tax on dividends paid to non-residents is 15% at the federal level (treaty rates apply). Iraq has not transposed the OECD Pillar Two global minimum tax. Tax losses may be carried forward for 5 years.

Note that KRG-registered companies face a parallel corporate framework administered by the KRG revenue authority. Federal GCT rates and KRG rates may differ — always confirm which jurisdiction applies.

What about VAT and indirect taxes?

Iraq has not implemented a general value-added tax. The country operates a sales-tax framework covering specified goods and services, plus excise duties on specific categories.

How are cryptoassets treated?

The Central Bank of Iraq (CBI) has issued cautionary guidance on cryptoassets — formal frameworks remain absent. Where cryptoasset gains are declared, they fall under existing income tax categories.

Kurdistan Regional Government — parallel tax jurisdiction

The KRG is Iraq's constitutionally recognised autonomous region in the north. It maintains its own revenue service, budget, and corporate registration system — independent of Baghdad's GCT.

OPEC founding member and oil-dominant economy

Iraq has been an OPEC member since the organisation's founding in 1960. Oil revenues account for roughly 95% of government income and approximately 90% of exports.

Post-2003 reconstruction and operational context

The 2003 US-led invasion and subsequent occupation reshaped Iraq's institutional framework. Tax administration modernisation has proceeded alongside broader governance reconstruction.

What is the treaty network?

Iraq has approximately 14 active bilateral tax treaties. The network is primarily regional — Arab League partners, Eastern European states, and a handful of South and Southeast Asian agreements. There is no US-Iraq bilateral tax treaty.

Iraq has NOT signed the OECD Multilateral Instrument (MLI). Bilateral treaty texts govern directly. GAFTA membership provides preferential customs treatment among Arab League members, but does not extend to income-tax mutual recognition.

Where does Iraq sit in the Middle East cohort?

Iraq anchors the oil-OPEC income-tax cohort within the broader Middle East — alongside states that levy standard income tax while drawing most revenue from hydrocarbons. The Gulf splits into 5 distinct archetypes:

Common pitfalls for foreign practitioners

Operating in Iraq involves a cluster of recurring traps for foreign-registered entities and individuals:

When should you work with an Iraqi tax professional?

Some Iraqi filings are straightforward — salary-only employees with wage withholding handled by employers. Others carry real complexity:

You can find vetted Iraq practitioners through the directory below.

This page is general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures with the GCT website or a licensed Iraqi practitioner before filing.

Currency and economic context

Iraq's official currency is the Iraqi Dinar (IQD), managed at a peg of approximately IQD 1,310 per USD. The peg is maintained by the Central Bank of Iraq through the official foreign-exchange window.