Iraq taxes residents on worldwide income and non-residents on Iraq-source income only. Iraq has no CFC rules, a gap commentators have noted leaves offshore subsidiary profits of Iraqi corporate groups outside the current tax net, with adoption of a CFC regime discussed as a possible future reform but not currently enacted. Iraq operates a self-assessment system, though tax administration capacity and enforcement remain genuinely uneven across the country's different administrative regions.
The Iraqi tax year is the calendar year.
Iraq's headline corporate income tax (CIT) rate is 15% (35% for oil and gas).
The headline personal income tax (PIT) rate is 15%.
0% - Iraq does not currently impose a general VAT or broad-based sales tax. Customs duties and excise taxes apply to imports, and specific consumption-type duties apply to select goods and services rather than a uniform rate. A separate lower-quality VAT-rate aggregator claims a flat 20% rate; given that same source has been found incorrect for other jurisdictions, it is not relied on here.
A legal person incorporated under Iraqi law is an Iraqi tax resident; companies established outside Iraq but with a place of management and control in Iraq are also treated as resident. For individuals, domicile in Iraq or presence exceeding roughly four months is generally cited as the residency trigger. Iraqi residents are taxed on worldwide income; non-Iraqi nationals are taxed on Iraq-source income regardless of residence status, and income derived abroad through funds/deposits held in Iraq is also taxable. All income derived from Iraq is subject to tax there regardless of the recipient's residence.
A non-Iraqi entity has an Iraq permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Iraq on the entity's behalf, assessed under Iraqi domestic law and any applicable tax treaty.
Iraq has no CFC rules - noted by commentators as a gap that leaves Iraqi corporate groups' offshore subsidiary profits outside the current tax net, with adoption of a CFC regime discussed as a possible future reform but not currently enacted.
Iraq has no thin capitalization rules and no EBITDA-based interest limitation - interest deductibility is currently unrestricted by a debt-to-equity or earnings-based cap.
Iraq does not use an elective check-the-box classification system. Iraq does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Iraq does not provide a broad participation exemption for foreign dividends; relief from double taxation is available primarily through Iraq's narrow treaty network.
Per PwC's Iraq tax summary, income tax paid to a foreign country on income earned there may be credited against Iraqi tax, capped at the amount of Iraqi tax assessed on that same foreign-source income - a genuine ordinary foreign tax credit, tracing back to Coalition Provisional Authority Order No. 49.
Iraq's treaty network is limited - constrained by decades of conflict and sanctions - at roughly 15 agreements. Older Arab League-era treaties include Egypt, Jordan, Libya, Somalia, Sudan, Syria, Tunisia, and Yemen (per Iraq Law Alliance), while the network has been growing more recently with treaties including Cyprus, Hungary, the Netherlands, Pakistan, and the UAE. Hungary is Iraq's only EU treaty partner. Iraq is also party to an Arab Economic Union Council treaty, though this does not appear to be widely applied in practice.