Banking, Money and Taxes in Iraq
Iraq’s economy is still recovering from the effects of war. Consequently, the banking infrastructure in Iraq is poorly developed. Services such as internet banking, ATMs and credit card facilities are rare which has resulted in a cash-based economy. Expats might initially find the system difficult to deal with. However, most expat employers provide support for navigating Iraq's financial landscape.
Money in Iraq
The Iraqi Dinar (IQD) is the official currency in Iraq. The Iraqi Dinar is subdivided into 1,000 fils, although inflation has rendered fils obsolete.
Notes: 50 IQD, 250 IQD, 1,000 IQD, 5,000 IQD, 10,000 IQD, and 25,000 IQD
Coins: 25 IQD, 50 IQD and 100 IQD
Coins are rarely used in Iraq.
Banking in Iraq
Iraq’s banking system is highly undeveloped and may not meet the standards that most expats are accustomed to. Despite this, there are signs of improvement which are demonstrated by the re-emergence of private banks and the reopening of the Iraq Stock Exchange.
As part of attempts at national economic rehabilitation and development, the Iraqi government have worked to encourage the presence of international banks in the country. A number of international banks have obtained licences to open branches in Iraq. Others have formed partnerships with Iraqi banks.
Iraq is mostly a cash-based society. Although large vendors have traditionally accepted US dollars and euros, they are increasingly only accepting the Iraqi dinar. Credit and debit cards are rarely accepted anywhere except at facilities found on expat accommodation compounds.
Due both to the challenge of opening an Iraqi bank account and the short-term nature of most expat contracts in Iraq, most employers pay their employees' salaries into their foreign bank accounts.
Taxes in Iraq
Taxable income in Iraq exists on a progressive tax scale. Employers generally handle taxes for expats working in Iraq. Most expat contracts in Iraq operate under a PAYE (pay-as-you-earn) system. This means that expats generally receive their net wage with their income tax automatically deducted.