At a Glance

• The KRG extended the import tax waiver for mild hybrid vehicles.
• The updated customs exemption runs from September 1 until November 1, 2026.
• The extension comes after a previous circular stripped mild hybrids of full tax exemptions.

The General Directorate of Customs, under the KRG Ministry of Finance and Economy, has announced a two-month extension on the customs duty waiver for mild hybrid vehicles in the Kurdistan Region.

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Key Statement and Focus Area

• The General Directorate of Customs issued a circular to all customs directorates.
• The circular says, “Based on the correspondence of the Ministry of Finance and the Presidency of the Diwan of the Council of Ministers, the customs period and the customs fee exemption for mild hybrid vehicles has been extended from September 1 until November 1, 2026.”

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According to the government's decision, mild hybrid vehicles will not be subject to any customs duties upon import.

Under Directive No. 14 of 2025 issued by the Ministry of Interior, hybrid and fully electric vehicles are completely exempt from customs duties.

The General Directorate of Customs previously issued a circular stating that, based on official correspondence from the Ministry of Finance and the Presidency of the Diwan of the Council of Ministers, mild hybrid vehicles will no longer be exempt from customs duties in the same manner as full hybrid vehicles.

The circular further notes that these vehicles, which represent a specific classification of hybrid cars, will be processed under standard vehicle customs procedures upon import; consequently, they will be taxed according to the specific rates and values designated for standard vehicles in the customs tariff schedule.

FYI

A mild hybrid vehicle combines a traditional combustion engine with a small electric motor and battery to improve fuel efficiency and assist with acceleration.

Unlike a full hybrid, its electric motor cannot power the car independently, meaning the vehicle cannot drive on battery power alone.

Alternative energy cars have surged in popularity across the Kurdistan Region due to rising fuel costs and improved import options, though mild hybrids have recently faced unique tax challenges.

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