The Iraq e-commerce market is expanding, and business leaders and corporate owners are racing to launch their business activities in digital marketing, if you plan...
The Iraq e-commerce market is expanding, and business leaders and corporate owners are racing to launch their business activities in digital marketing, if you are planning to launch your electronic store, it is important for you to be aware of all the laws and tax legislation applied to sales of Iraqi electronic stores
The topic of our article today, which highlights the tax regime for electronic stores in Iraq, and the importance of such procedures for shop owners, addresses two important points concerning how these taxes are accounted for and can be reduced by legal means.
Are your electronic store sales subject to the tax system in Iraq?
To answer this question, it is sufficient to know that all contributing or limited companies established under Iraqi laws 1, whose main headquarters are located within Iraqi territory, are automatically subject to an income tax; the same applies to Iraqi electronic stores.
Electronic stores are embedded under these two types of companies, considering that you are the owner of an electronic store in Iraq, located inside Iraqi territory, and your store is taxed as follows:
- Tax on the Iraqi person residing inside or outside Iraq irrespective of the location of receipt.
- A tax on foreign companies registered in Iraq that are only on their income within Iraqi territory.
- So, yeah, electronic stores are taxed.
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How to calculate taxes on sales of an Iraqi free electronic store
- From 2008 to date, the Iraqi Tax Authority (GPA) applies a tax on profits of various companies and electronic stores within Iraq, ranging from 10 to 14%, depending on the type of activity of these companies as follows:
- 15% profit tax.
- 10% sales tax.
The annual income tax3 for any Iraqi electronic store is calculated in accordance with the following divisions:
- 3% for work estimated at 250,000 dinars.
- 5% for work of between 250,000 - 500,000 dinars.
- 10% for work of between 500,000 - 100,000 dinars.
- 15% for over 1 million dinars.
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Legal means of reducing your electronic store taxes in Iraq
You may take advantage of some of the Iraqi Tax Authority ' s laws to reduce [the tax costs] on your e-commerce, which are as follows:
- Exemption of 2 many trade goods and activities from annual income tax and sales tax such as agricultural products and industrial products.
- To grant domestic and foreign companies registered in Iraq tax exemptions such as payment and depreciation costs and liquidating losses that may be incurred for the following five years.
[Also read sales taxes on products of the electronic store in Iraq] (https://trinavo.com/%d8%b6%d8%a7%d8%a6%8a%d8%8%8%88%d8%8%d9%8%d8%8%8%8a%d8%d8%d8%8b9%d%8%8%d8%d%8%d8%8%8a-d85%9%d%9%d%8%8%d8%d8%8%d%8%8%d8%d8%8%d%d8%8%8%d8%d8%8%8%d8%d%8%d8%8%d8%d8%d%d%d%d8%8%8%d%8%dddd%8%8%8%8%d8%d%8%8%8%8%8%8%d%d%ddd%8%d%8%8%8%8%d%d%8%ddd%8%8%d%d%8%8%d
The importance of taxing your e-market sales
To subject your shop to the tax system not only means that it has a legitimate character, but has a number of advantages, the most important of which is:
Transparency and credibility: Tax calculation of e-commerce owners helps to enhance the transparency of business transactions and credibility. Taxes are also beneficial to you as they are spent on improving public services for citizens such as improving infrastructure and services, which positively affects the performance of your electronic store in Iraq. Taxes also directly affect your shop in terms of purchasing power, so it is important to find ways to reduce taxes on your client products, which positively affects the increase in the purchasing power ratio of your store. - Considering that the value of taxes must be accounted for within the general costs of the store.
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Source of article:
1]. Income Tax Guide] (http://wiki.dorar-aliraq.net/iraqilaws/law/20863.html)
2]. Exemptions from income tax for companies and enterprises] (https://investbasrah.com/ar/%D8%B9%D9%86-%D8%A7%D9%84%D8%A8%8B5%D8%DB5%D8%A9/%D8%D9%84%D8%A5%D8%A5%D8%BB9%D%D81%D8%D8%A7%A(D8A.A7%D.A.A.A.A.A.A8%D.A.D%)
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