Employer Tax Contributions

Tax Type	Rate	Base
Social Security	12% (general); 25% (prime/oil & gas)	Basic Salary + Allowances
Employee Income Tax	Progressive: 3% to 15%	Taxable Income (after deductions)
Corporate Income Tax	15% (general); 35% (oil & gas)	Profits sourced in Iraq
Withholding Tax (WHT)	15% (non-residents for specific payments)	Payments to non-residents

Filing & Compliance

• Monthly tax withholding and social security contributions are due by the 15th day of the following month.
• Annual income tax returns (Form D/4A) are due by March 31st.
• Employers must register with the General Commission of Taxes (GCT) and the relevant social security authorities.

In Iraq, employees are subject to various deductions from their salaries, primarily income tax and social security contributions. These deductions are managed differently in Federal Iraq and the Kurdistan Region, with distinct rates, thresholds, and deadlines.

Federal Iraq Tax Deductions

• Income Tax: A progressive income tax system is in place, with rates ranging from 3% to 15% of an employee's salary. Specific rates depend on the income level.
• Social Security: Employees contribute 5% of their net salary to social security. Employers contribute 12%, or 25% for those categorized as "prime" employers. This contribution is calculated after deducting allowances.
• Allowances and Exemptions: Certain allowances are deductible when calculating taxable income. This includes a "risk allowance," typically capped at 30% of the base salary. Government employees receive a 100% deduction on their salaries.
• Deadlines and Reporting: Tax withheld from employees must be remitted by the 15th of the following month. Annual tax returns are due by March 31st of the following year.

Kurdistan Region Tax Deductions

• Income Tax: A 5% direct deduction is applied to the net income of employees earning over one million Iraqi Dinars monthly. A progressive tax also exists in the region, with rates varying based on income level.
• Social Security: Employee contributions are 5% of their net salaries, mirrored by a 12% employer contribution.
• Direct Deduction Threshold: Only employees earning more than one million Iraqi dinars are subject to the 5% direct income tax deduction.
• Deadlines and Reporting: Tax remittances and quarterly returns are due within 21 days of the quarter's end. Annual tax returns must be submitted by March 1st of the following year.

General Tax Information

• Tax Year: The tax year in Iraq aligns with the calendar year, running from January 1st to December 31st.
• Currency: The Iraqi Dinar (IQD) is the official currency.
• Tax Treaties: Currently, there isn't a tax treaty between Iraq and the United States, meaning US citizens working in Iraq are subject to both Iraqi and US tax laws but may be eligible for certain exclusions or credits to avoid double taxation.

It is important to consult with a tax professional for personalized guidance. Tax laws and regulations can change, so staying updated with current information is always recommended. This information is current as of February 5, 2025.