Latest updates on Iraqi laws.

This is a publication for CMS’s 2018 Getting the Deal Through Report containing latest updates on Iraqi laws.

 

OR2018Iraq

Federal Budget of 2019 Voted

This is an update regarding today’s voting by the Iraqi parliament approving om the approval of government’s 2019 budget at US$88.6 billion which contains one of the largest spending bills; whereby the calculation of revenues from the export of crude oil is set at a rate of $56 per barrel with an export rate of 38.8 million barrels per day. The major part of revenues is oil export-dependent at a rate nears to 90%.

As for the expenditures, the 2019 federal budget included allocation of US$111.7 billion for current, operational and investment expenditures budget.

The total deficit planned for the federal budget is at US$23 billion.

Iraq Visa Issuance in 72 Hours

On 23 October 2018, the Iraqi Ministry pf Interior has issued significant facilitation circular pertaining to visa issuance to the businessmen, investors and directors of major companies operating or willing to operate in Iraq by authorizing the Director General of civil status, passports and residency as well as the Ambassadors and Consuls in (EU, USA, UK, China, Japan and South Korea) to grant the Iraqi visa to applicants within 72 hours of submitting application.

VIP Taxpayers Dedicated Bank Account

The General Commission of Taxes in Iraq “GCT” and to facilitate the depositing of tax payments or settlements thereof, opened two new bank accounts in Al-Rafidain Bank for to receive said payments from VIP Taxpayers (major corporations operating in Iraq) to cover corporate income Tax, employees’ withheld income tax, as follows:
Bank Name: Al-Rafidain Bank
GCT Branch / 462:
Account Name: Deposits
Account No.: 60089
Code: IQ14RAFB462010000060089
Account Name: Trusts
Account No.: 60088
Code: IQ14RAFB462010000060088

Effect of General Conditions of Contracts vs. Standard Documents of Tenders

Content of Publications:
The current direction of the Iraqi Ministry of Planning in regard to the General Conditions for Engineering Contracting (Civil works version – Electrical, Mechanical and Chemical works versions) was explained via letter No. 714/7505 dated 9/4/2017 by circular to all ministries and contracting departments to consider the General Conditions for Contracting as inapplicable in tendering and contracting procedures since they were replaced by the Standard Documents for Tenders, and thus the said Standards became binding to government contracting agencies effective 1/7/2016;
It is worth mentioning that the binding effect of Standards may not be extended to contractors unless stated in the contract clearly or by reference as they are meant to regulate and govern the functionality of the contracting agency in particular.

Please feel free to contact us for further information and elaboration

Tax Exemption

A significant tax circular issued by the Legal Directorate of the Iraqi Ministry of Planning all ministries and contracting agencies in Iraq regarding the application of Decree 767 of 1987 that is now including foreign subcontractors performing development projects in the tax and fees exemption in addition to the foreign prime contractors.
Please feel free to request further information using the fixed contact channels to our Firm.

Deadline Extension of Income Tax Report 2018

Deadline Extension of Income Tax Report

As per circular dated 26 June 2018, the General Tax Commission is extending the deadline for submitting Income Tax Reports of corporates and individuals for one month as of 1 July 2018, the new deadline is 31 July 2018.

Deadline Extension of Income Tax Report 2018

Tax on Profitability of Foreign Companies 2018

Tax News Update

In a recent circular by the General Commission of Tax, a new mechanism was put in force to regulate Tax on Profitability of Foreign Oil Companies Based on suggestions by the Ministry of Oil / Contracts and Licenses Directorate; the summary of the new mechanism is to rely on the foreign companies submittal (declarations) which declare the profitability achieved for the fiscal year 2017 as well as the realized tax on a percentage of 35% of the total profitability provided that these declarations and the means of payment are made under a memorandum of assessment for the purposes of receiving the tax .furthermore, declarations hall be subject to Tax Commission verification regarding the revenues and profitability subject to confirmation of the Ministry of Oil / Contracts and Licenses Directorate and so that the recoverable and non-recoverable expenses can be determined.

Please contact us should you require further details

IRAQI NATIONAL OIL COMPANY

The Iraqi Parliament voted in its regular session on Monday, 5/3/2018, on the draft law of the Iraqi National Oil Company, submitted by the Committee of Oil, Energy, and Natural Resources;

The objective of the new State Oil Company is to ensure the exploration, development, production and marketing of oil resources in the fields and land allocated to them under the law on behalf of the Iraqi state and to increase production and development  of the oil and gas industry and facilities and related structures and working methods on the basis of efficiency, flexibility and competitiveness to maximize revenues for the benefit of the Iraqi people and in accordance with recognized international standards, which required the formation of the Iraqi National Oil Company as a wholly owned public company reflecting the concept of people’s ownership of oil and gas.

The new law shall come into force upon publication in the official gazette following the ratification by the President.

Iraq 2018 Federal Budget Law

The Iraqi Parliament voted, on 3 March 2018, on the 2018 Federal Budget Law, as follows:

The annual spending budget is amounting to 104 trillion Iraqi Dinars (approximately 88 billion USD).

The revenues of the budget are estimated at 91.6 trillion Iraqi dinars, (approximately 77.4 billion USD).

The total deficit in the budget is 12.5 trillion Iraqi dinars, (approximately 10.58 billion USD).

The estimated revenues from the export of crude oil were calculated on the basis of the rate of 46 dollars per barrel at an export capacity of 3.88 million barrels per day, including 250 thousand barrels per day from Kurdistan region.

Please contact us should you require further information on the subject Law