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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4430
Experience:  FCCA FCMA CGMA ACIS
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I am a director of a UK Limited Company and I am currently

Customer Question

I am a director of a UK Limited Company and I am currently carrying out work in Iraq. I submit a timesheet for work completed and am paid by the agent in Iraq into my UK business account. The rate paid is a net amount with the 15% Iraqi tax being deducted before the income is paid to my company. Can I offset this 15% Iraqi tax against my UK Corporation Tax by claiming tax relief?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Unfortunately Iraq does not have a double taxation treaty with the UK. Had it done so then taxation paid by the company would be allowed as a tax credit against UK Corporation Tax. For your company it remains an irrecoverable cost.

Sorry to bring such bad news.
Customer: replied 3 years ago.

Thank you Keith. I had realised that there was no DTT with Iraq but found manual DT9801 ( http://www.hmrc.gov.uk/manuals/dtmanual/DT9801.htm ) on the HMRC website which states that income tax in Iraq is admissible for unilateral relief and also other references to claiming relief where there is no DTT in place. Have you ever had any experience of this?

Expert:  bigduckontax replied 3 years ago.
Oh, yes it is mentioned in general discussion. Clearly HMRC are allowing it as a tax credit, Iraq, in general, is in favour of double taxation relief.

I would suggest you try claiming it as a tax credit. After all, HMRC can only say no and they might say yes!
bigduckontax and 2 other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.