Tax Regimes
Iraq
The Ministry of Oil has introduced four types of model service contract under which all O&G companies operate
Development and production service contract (DPSC), Service exploration and production contract (SEPC), Producing
fields technical service contract (PFTSC), Gas field service and development production contract (GSDPC)
Production is governed by service agreements for which production volumes, rather than market prices, are key drivers of
revenue
A 35% corporate income tax is applied to each contractor’s remuneration fee, payable annually
Under the PSCs with EPG royalties and taxes are paid by EGPC/EGAS on behalf of the JV partners
Royalty of 10% of gross production is payable to the Egyptian government and is borne by the EGPC
Corporate tax of 40% of revenue paid by EGPC on behalf of the JV partners. The volume equivalent to this tax
revenue is included in net entitlement reserves
No additional profits taxes are applicable
Under the service contracts a corporate income tax of up to 30% is payable by the JV partners such that each JV partner’s
production allocation is net after tax profit
A 10% withholding tax payable on dividends and other cash distributions to shareholders was recently announced
Egypt
Income tax of 35% is applied such that each JV partner’s share of profit oil is net after tax profit
This tax is paid by the Ministry of Oil and Mineral Resources on behalf of the JV partners out of the government’s share of
profit oil. The volume equivalent to this tax revenue is reflected in net entitlement reserves.
Additional sales tax (known as "Fixed Tax“) of 3% on all exploration expenditures applies for each PSC
In addition to the above, the JV partners are required under each PSC to pay annual training, institutional
Yemen
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