Social security measures in Iraq are currently in place

Key updates 

The impact of the COVID-19 (Coronavirus) has been felt globally, creating unprecedented challenges for businesses. As a result, the government in Iraq has put a curfew in place in Baghdad until 19 April, 2020, and in Erbil until 2 May, 2020. It is unclear whether the curfew will be extended further.

With government offices closed and the curfew in effect, businesses in Iraq are
finding it challenging to complete employment tax and social security filings on time. The Pensions and Social Security Offices (PSSO) in Baghdad and Basra have recognized the difficulties faced by businesses and announced the below measures on the submission of social security filings:

  • Entities will be able to continue to remit social security contributions online via the Automated Clearing House (ACH) ahead of the monthly filing deadlines. Monthly social security forms and the proof of remittance will need to be shared with the PSSO in Baghdad and Basra via email.
  • Any penalties resulting from delay in submitting social security forms and its respective payments are exempted for the month of February 2020 onwards.

The PSSO in the Kurdistan Region has verbally indicated that the penalty for late payment of social security contributions will be exempted for the month of February 2020 onwards, however they are yet to issue a formal announce in this respect.

The tax authority in Federal Iraq and Kurdistan Region have not announced any filing extension on employment tax filing deadlines.

Deloitte comments

With a curfew imposed and social distancing measures in effect, businesses in Iraq are currently at a risk of being non-compliant with respect to employment tax filings.

The Iraqi government has announced the COVID-19 situation to be regarded as a force majeure event. In this respect, we expect the authorities in Iraq to potentially extend the filing deadlines and waive any penalties and interest incurred during this period, to allow businesses to adapt to the current situation and ensure continued compliance.

In the absence of formal announcement on employment taxes, it would be prudent for businesses to continue to remit monthly employment tax liabilities ahead of the deadlines and work towards completing the filing once the curfew is lifted in Iraq. With respect to Kurdistan Region, given that tax payments continue to be made via certified cheques, it would not be possible to make any tax payments until the curfew is lifted.  

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