Objecting to an income-tax assessment in Iraq
The Law Office of Ali Barakat in Baghdad sets out the path for objecting to an income-tax assessment under Income Tax Law No. 113 of 1982, published in the Official Gazette, issue 2917 of 27/12/1982. The page arranges the periods and the bodies as they appear in articles 33 to 45.
A written objection before the assessing authority
Article 33, first, gives the taxpayer, after being served with the assessed income and the tax due on it, the right to file a written objection with the assessing authority that served the assessment, or with any office of the General Commission of Taxes, within twenty-one days of service, stating the grounds of objection and the amendment sought. The taxpayer must produce to the assessing authority the books, records and statements of income needed to prove the objection. The assessing authority may accept an objection after that period if it is satisfied that the objector was unable to file it because of absence from Iraq, or illness that prevented work, or another compelling cause, under paragraph 2.
The taxpayer’s objection is not considered unless the assessed tax is paid during the objection period. If the taxpayer is unable to pay the assessed tax in full, the assessing authority may, once satisfied of that inability, collect it in instalments in accordance with instructions issued by the Ministry of Finance, subject to article 46, under paragraph 3 of article 33. The objection is one path. Payment of the tax, or its collection in instalments, is a condition of the objection being considered, not a later step that can be postponed without a basis in the text.
If the objector and the assessing authority agree on the assessment of income, or if the objection is filed after the legal period and the assessing authority does not agree to extend it, the assessment becomes final and the objection is not accepted, under article 34. Finality of the assessment is a legal effect that follows from agreement, or from expiry of the period without an accepted extension, not a general administrative label.
The assessing authority must give the taxpayer written notice to pay the tax, specifying its amount and the date it falls due. The taxpayer’s signature on the assessment memorandum is treated as service of the notice to pay, under article 44. If the tax is not paid within twenty-one days of service under article 44, an amount equal to 5% of the tax is added to it, and that amount is doubled if payment is not made within a further twenty-one days after the first period expires. The Minister, or a person the Minister authorises, may exempt the taxpayer from all or part of the additional amount if satisfied that the delay was due to absence from Iraq, illness that prevented work, or another compelling cause, and may refund the additional amount if it has already been paid and one of those causes is present, under article 45. Those percentages are the rule laid down in the article itself.
Appeal to the appeal committee, then the special cassation body
A person whose objection to the amount of income or tax has been refused by the assessing authority may appeal that decision to the appeal committee (لجنة التدقيق) by a petition filed with the committee or with any office of the General Commission of Taxes, within twenty-one days of being served with the refusal, and must prove the appeal with documents, records and other statements, under article 35, first. The assessing authority may accept an appeal after the legal period if satisfied that the appellant was delayed by absence from Iraq, illness that prevented work, or another compelling cause, and that the appeal was filed without unreasonable delay on the appellant’s part, under paragraph 2. The appeal committee must not continue with the appeal if it appears that the taxpayer has fallen behind in paying instalments of the assessed and instalment-arranged tax, unless the taxpayer proceeds to pay them, under paragraph 3.
The appellant and the assessing authority are given notice of the day of the hearing before the appeal committee at least seven days in advance. The parties must appear in person or by an agent on the appointed day and hour, or state that they rely on the written statements they have already filed. The committee may cancel, confirm, increase or reduce the assessment, stating its reasons in the decision. It may also confirm the assessment if neither party, or one of them, appears without a lawful excuse, or adjourn the appeal for such period as it thinks fit, under article 36.
The committees that hear appeals are formed by a notice the Minister issues in the Official Gazette, chaired by a judge of at least the second class, with two officials specialised in financial matters as members. Alternate members are appointed on the same conditions to replace the original members in their absence, under article 37. The appeal committee formed in Baghdad must hear cases that fall within the competence of another committee if the appellant so requests. The Minister, or a person the Minister authorises, may transfer any appeal from one committee to another, with or without a request from the appellant, if there are grounds for doing so, under article 38. The committees hear and decide everything connected with the assessment of income, its liability to tax, refunds and allowances, and the assessing authority must implement the decisions after they have been served on it and on the taxpayer, under article 39, first.
Decisions of the appeal committees are final if the amount of tax in them is ten thousand dinars or less, under article 40, first. If the amount is more than ten thousand dinars, the assessing authority and the taxpayer may object to the decision within fifteen days of service, before a special cassation body formed under the chairmanship of a judge of the Court of Cassation, with two directors-general from the Ministry of Finance, one member from the Federation of Iraqi Chambers of Commerce and one from the Iraqi Federation of Industries, by a notice the Minister issues and publishes in the Official Gazette. The body may cancel, confirm or amend the decision, and its decision is final, under paragraphs 2 and 3. A taxpayer who wishes to take a decision of the appeal committee to cassation must pay a charge into the treasury of the General Commission of Taxes, at the rate and with the upper limit the article fixes, and the charge is treated as final revenue of the public treasury, under paragraph 4.
Notices and forms issued by the assessing authority are served by delivery to the addressee or to the persons named in article 42, or by sending them by registered post to the address registered with the assessing authority. If they are sent by registered post, they are treated as served on a person resident in Iraq fourteen days after the date of registration, and on a person resident outside Iraq sixty days after the date of registration, under article 42.
| Step | Period | Article |
|---|---|---|
| Written objection to the assessment | Twenty-one days from service | 33 |
| Appeal against refusal of the objection to the appeal committee | Twenty-one days from service of the refusal | 35 |
| Notice of the day of the hearing before the committee | At least seven days before the date | 36 |
| Objection to the committee’s decision before the special cassation body, if the tax in the decision exceeds ten thousand dinars | Fifteen days from service of the decision | 40 |
| Payment of the tax after service of the notice to pay, failing which the additional amount in article 45 is added | Twenty-one days, then a further twenty-one days for the doubled amount | 45 |
| Service by registered post treated as effected, in Iraq / abroad | Fourteen days / sixty days from registration | 42 |
Legal basis and sources
Frequently asked questions
Where is the objection filed?
With the assessing authority that served the assessment, or with any office of the General Commission of Taxes, under article 33.
Is the objection considered if the tax has not been paid?
Article 33, third, prevents the objection from being considered unless the assessed tax is paid during the objection period, with instalments allowed if the assessing authority is satisfied of the taxpayer’s inability, in accordance with Ministry of Finance instructions and subject to article 46.
When does a decision of the appeal committee become final?
If the amount of tax in the decision is ten thousand dinars or less, under article 40, first. If it is more than that, an objection may be made within fifteen days to the special cassation body, whose decision is final.
Related topics and articles
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