Iraq – tax clearance required for payments to contractors

Iraq – tax clearance

The resolution aims to maximize the income of Social Security and Pensions Directorate.

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Iraq’s Council of Ministers has decided1 that all governmental institutions and ministries should not release any payment to the “Contractors” unless they provide tax clearance certificate issued by the Social Security and Pension Directorate / Ministry of Labor and Social Affairs. The resolution aims to maximize the income of Social Security and Pensions Directorate2

In particular, the resolution stipulates that ministries and government institutions may not grant any new license, renew any existing license or release any payments to employers, companies, contractors, universities or hospitals without providing tax clearance certificate issued from Social Security and Pension Directorate / Ministry of Labor and Social Affairs. The certificate must confirm their employees’ registration and coverage under the social security scheme with reasonable salaries and services for all employees.

KIMADIA, the state-owned company of the Ministry of Health, issued an announcement requesting all contractors and scientific offices to complete the tax assessment within one month for all contracts achieved from 2010 to 2015. Otherwise, KIMADIA will seize the deducted amounts from performance bonds and remit these amounts to the tax commission. For past contracts where the performance bonds were released, the taxes will be deducted from current contracts that are subject to tax assessment. 

At the end of May 2015, the tax commission issued a resolution3 granting an automatic extension of the tax filing deadline for all taxpayers to August 31, 2015 (from May 31). 

Footnotes

The decision was made in Session 17 on 28 April 2015. 

According to law number 39 for 1971. 

This resolution was published on the tax commission website on May 28, 2015.

 
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