Iraq’s Council of Ministers has approved a framework requiring importers to pay customs duties and estimated tax deposits in advance. According to the Prime Minister’s Office, it takes effect on 1 October 2026.
Under the decision as reported, importers will deposit foreign transfer amounts for import purposes with authorised banks. Those transfers will not be released until the importer has settled the relevant customs duties and estimated tax deposits through the ASYCUDA platform and approved electronic payment mechanisms. The funds are then transferred to the general treasury accounts and to designated accounts at the Ministry of Finance within 15 days.
The calculation basis matters as much as the timing. Duties and tax estimates are to be computed on preliminary data submitted by the importer: commercial invoices, shipping documents, customs classification, and information on the type, origin and value of the goods, assessed against the approved customs tariff schedules.
What actually changes
Three things, and none of them concern the rate.
Timing of cash. Duty and a tax deposit are funded before the goods move rather than at clearance. For a company running several shipments in parallel, that is a working capital question before it is a tax question.
The weight now carried by the declaration. Classification, origin and declared value have always mattered. Under this framework they sit in front of the payment release rather than behind a post-clearance assessment. An error of that kind no longer produces a later adjustment. It produces a transfer that does not move.
The word “estimated”. The published wording describes a deposit calculated on preliminary data. The reporting does not describe how that deposit is reconciled against final assessment, or what becomes of any excess. Until a procedure publishes, that reconciliation should be treated as an open question rather than a settled refund mechanism.
The contract question
For a foreign supplier or contractor, the operative question is not the policy. It is who absorbs it. That is answered by two terms already sitting in the agreement: who is importer of record, and which delivery term applies. A DDP obligation, a DAP obligation and an ex-works sale distribute this change very differently, and so does a fixed lump sum priced on duty settled at clearance.
This is the third Iraqi customs measure this year to route through ASYCUDA, following the revised national tariff schedule in force from 1 January 2026 and the mandatory electronic verification of certificates of origin and commercial invoices from 10 July 2026. Separately, and announced the same day, the cabinet approved IQD 15 billion for infrastructure at the Rabia, Al-Waleed and Safwan border crossings.
Implementing instructions have not been published, and no scope carve-out has been announced. Companies importing into Iraq have roughly six weeks to establish where this cost lands.
Iraq Gate Legal Consulting advises foreign companies on Iraqi customs and tax exposure, import structuring, and the contract terms that allocate it. Contact our team.
Source: Iraq Business News, “New Rules for Pre-Payment of Iraqi Customs Duties” and “Infrastructure Funding for Three Iraqi Border Crossings,” both 21 August 2026, sourced to the Iraqi Prime Minister’s Office.
This article is provided for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship with Iraq Gate Legal Consulting Inc. Legal and regulatory positions in Iraq change, and the measures described above are reported cabinet decisions for which implementing instructions had not been published at the time of writing. No outcome is guaranteed. Please seek advice on your specific circumstances before acting.
