No. Iraq applies only a narrow selective sales tax on specific goods and services; ordinary sales are out of scope.

What are the social security rates in Iraq?

The employee pays 5% and the employer 12% (25% for oil & gas employers), under Law 18 of 2023.

Is Kurdistan taxed the same as federal Iraq?

Not exactly — the Kurdistan Region has its own tax administration and requires separate registration. bookeeper keeps them distinct.

Localized for Iraq

Accounting & tax software for Iraq

AI-powered, bilingual accounting tuned to Iraq — the right tax on every invoice, local payroll, and reports in Arabic and English.

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Currency
IQD
Iraqi Dinar
Tax
None (selective)
Selective Sales Tax
Social insurance
5% / 12%
Employee / Employer

Social Security (Law 18 of 2023)

Payroll & social security

Salaries face progressive income tax (3%–15%) plus social security. Note that the Kurdistan Region administers tax separately. bookeeper treats federal Iraq and the KRG as distinct regimes.

Employee

Employer

12%

Rules that matter

Social security: employee 5% + employer 12% (25% for oil & gas / prime employers).
Income tax is progressive from 3% up to 15% on monthly income.
The Kurdistan Region requires separate registration and often applies a flat rate in practice.

Selective Sales Tax

How sales tax works in Iraq

Iraq has no VAT. Instead a narrow selective sales tax applies only to specific categories — there is no input/output credit chain. bookeeper models it as a per-line rate, not a full VAT engine, so ordinary sales stay out of scope.

Figures for Iraq are indicative and change frequently — confirm current rates with a local advisor. bookeeper makes every rate easy to update.

Standard rate

None (selective)

Filing

The selective tax is collected on the listed goods and services only.

E-invoicing

No mandate yet

No national mandate yet

Iraq has no tax e-invoicing mandate — there is no VAT clearance system to file against. bookeeper keeps clean digital records and is ready if a national system is introduced.

How each item is taxed

Standard300%
Alcohol & tobacco
Standard20%
Mobile recharge & internet
Standard15%
Cars and travel tickets
Standard10%
Deluxe / first-class hotels & restaurants
Zero-rated0%
All other general goods & services (out of scope)

bookeeper replies

Your AI accountant, in Arabic

Ask in plain Arabic. bookeeper applies Iraq's rules and answers in the language you use.

You ask

هل تحتاج هذه المبيعة إلى ضريبة مبيعات؟

bookeeper replies

السلع العادية خارج النطاق في العراق، ويطبّق bookeeper النسبة الانتقائية فقط على البنود المدرجة كالاتصالات والسيارات والضيافة الفاخرة.

Iraq

Why Iraq businesses choose bookeeper

Selective sales tax modelled correctly per line — no phantom VAT on ordinary sales.
Federal Iraq and the Kurdistan Region kept as separate tax regimes.
Progressive income tax and social security calculated on every payroll run.
Whole-dinar handling and Arabic-first books for Baghdad, Basra and Erbil.

Coverage across the region

Ready when you are

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