Tax Registration Compliance in Iraq
After incorporation, companies in Iraq must register with the tax authorities to obtain a tax identification number and begin meeting their corporate tax obligations. Tax registration is mandatory for all legal entities operating in Iraq and is required before issuing invoices, booking expenses, or submitting tax filings.
Corporate Tax Registration
Companies must complete corporate tax registration with the General Commission for Taxes (GCT) to establish their tax file and confirm their taxable presence in Iraq. Once registered, the company becomes subject to:
- Corporate income tax declarations
- Tax audits and assessments
- Annual tax filings and reporting obligations
Corporate tax is generally calculated on the net profits of the business after allowable deductions and adjustments, in accordance with Iraqi tax regulations.
Monthly Payroll Tax (Personal Income Tax Withholding)
Employers in Iraq are responsible for withholding personal income tax from employees’ monthly salaries and paying it to the tax authority. This system places the compliance burden on the employer rather than the employee.
Key obligations include:
- Monthly payroll tax calculation
- Monthly submission of payroll tax declarations
- Monthly remittance of withheld taxes to the tax authority
- Maintenance of payroll records for audit and verification
Payroll tax applies to both Iraqi and foreign employees working in Iraq.
Tax Compliance Benefits
Proper tax registration and compliance:
- Enables lawful invoicing and tax recognition of expenses
- Reduces tax exposure, penalties, and disputes
- Facilitates dealing with banks, clients, and government bodies
- Supports transparent financial reporting and accounting functions
How Etihad Can Assist
Etihad Law supports businesses in Iraq with:
- Corporate tax registration
- Payroll tax withholding compliance
- Monthly and annual tax filings
- Preparation and review of tax documentation
- Advisory on tax assessments, audits, and disputes