Under the tax law, deductible annual allowances for salaries received are as follows:
- An amount equal to 100% of salaries received from the government, public institutions, and local authorities.
- Contributions to a social security system.
- The Iraqi tax authorities allow an exemption from tax in relation to ’risk allowances’; in practice, such allowances should not exceed 30% of the basic salary.
Under the tax law, deductible annual allowances for salaries received from the private sector for income tax purposes are as follows:
|Personal allowances for bachelor||2,500,000|
|Personal allowances for a married person||4,500,000|
|Age allowance (if over 63 years old)||300,000|
|Child allowance (not restricted, provided the child has no income, is less than 18 years old, and engaged in full-time academic studies)||200,000|
In order to obtain such allowances, proper supporting documents are presented to the concerned tax authority in order to be effective; otherwise, the tax authorities shall treat the taxpayer as a ‘bachelor’ and grant the annual allowance indicated above.