The General Commission for Taxes in Iraq grants payment flexibility in addition to penalties and interest waiver to International Oil Companies to encourage resolution of historical tax assessments.

20 February 2025 – Important decisions have been enacted during the International Tax and Investment Center (ITIC) Working Group meeting held in Istanbul in November 2024, which assembled representatives from the GCT, SC, PCLD, IOCs and tax advisory firms including Deloitte. 

While a number of those decisions requiring further steps are still work in progress with the relevant parties, an important milestone was reached on 11 February 2025 with the issuance of formal instructions (the Instructions) by the Prime Minister office relieving IOCs from penalties and interests on their historical assessments. 

Such relaxation measures demonstrate the willingness of the GCT, SC and Prime Minister office to ease resolution of tax matters, taking full responsibility for the delays incurred and providing payment flexibility.

In light of those Instructions, No. 3065/2505160 of 11 February 2025, IOCs are offered the following incentives:

• Full waiver of penalties and interest for IOCs incurred on the historical Corporate Income Tax and Personal Income Tax filings up to 2023.  
• IOCs subject to significantly higher tax exposure based on the GCT assessment, are given the right to submit a request to settle their dues through instalments, details of which shall be decided on case-by-case basis.

Whilst there is no formal deadline imposed by the GCT to request for the waiver and installment plan, the Instructions impose a 3 month period (starting from 11 February 2025). During this period, IOCs are expected to finalize the ongoing discussions on historical tax assessments and settle the tax liability (principal only) to the GCT. Failure to meet this condition will prevent IOCs from availing the measures covered by these Instructions.

The Instructions have been long awaited and are welcomed by IOCs who are now encouraged to complete their historical tax assessment in a prompt manner with the support of their tax advisor. Reach out for any further discussion on this matter.

Notice

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