In order to facilitate the procedures of taxation process for the foreign companies working in Iraq according to the oil licensing rounds, and overcome deterrents and obstacles encountering such companies, a meeting was held in the PMAC (Prime Minister’s Advisory Commission) on 17 June 2019, chaired by Dr. Abdulkarim Hussein. In the meeting, a new simplified and plausible mechanism of tax- calculation was set for the foreign companies working in Iraq according to the oil licensing rounds. The meeting further focused on the importance of transparency principle and mutual trust as being the predominant in the disclosure of all information and revenues attained. Also, the meeting urged the General Taxation Commission to facilitate the taxation procedures of the companies of oil licensing rounds.
The representative of the General Taxation Commission said that facilitating the process of tax accounting for these companies is one of the priorities of the Commission in order to ensure a sound position. He also pointed out that the beneficiary companies of the outputs of this meeting should cooperate with the General Taxation Commission by providing all information requested by the Commission, especially issues related to salaries, wages, other revenues, refunds and sub-contractors.
The representative of the General Taxation Commission further explained that the problems which may occur in tax accounting are mostly related to the financial statements which may not be disclosed to the Commission. Also, the problems that may occur with the Ministry of Oil concerning the delays on the part of the Ministry in providing information and data that may help the Commission in its job.
Furthermore, the representative of the General Taxation Commission said that there is an integrated study in progress regarding the establishment of a program and a mechanism for the companies of oil licensing round, which include determining the number of employees, wages, salaries, job classification and working hours. This study is expected to help control the submission of accurate data and information to the General Taxation Commission to determine the tax rate.
The recommendations of the meeting stated that the General Taxation Commission will prepare a clear and simplified mechanism for the purpose of tax-calculation, in addition to conducting courses to explain this mechanism to companies if necessary. In addition to handling the errors and giving the companies a period of time address them, as it was confirmed that the tax accounting process should be direct between the oil companies and the General Taxation Commission without any intermediary.
It is worth mentioning that this meeting has come as a follow-up to the workshops held on 12/6/2019 and is expected after the adoption of the recommendations of the meeting and making them effective that this will bring benefit to Iraq in general and oil companies in particular, and it would create a successful investment environment in Iraq.
Attorney Hussein Najm Abdullah