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Updated : 02/10/2014

Income taxes abroad – Iceland

What's your situation?

I'm an employee Choose country

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Common rights across EU countries


* Information not yet provided by national authorities

Which income will be taxed in Iceland?

  • Live in Iceland? (min. 183 days in a 12 month period) You must pay tax on your worldwide income there.

  • Lived in Iceland less than 183 days in a 12-month period? You are not considered tax resident and only pay tax on income earned in Iceland.

  • Income from other EU countries? Check you never pay tax twice on the same income.

How much will you pay?

Combined national and municipal income tax rates for 2011

Bracket

Annual income

Rate

1

up to ISK 229,999

0%

2

ISK 230,000 – 474,366

37.34%

3

ISK 474,367 – 704,366

40.24%

4

over ISK 704,367

46.24%

When and how do you pay?

Before you start working in Iceland, you must:

  • apply for a tax card from the Internal Revenue Directorate
  • give this card to your employer, who will deduct tax from your salary and pay it to the Directorate.

Your pay slip will show the amounts deducted as tax, pension contributions, etc. Keep your pay slips, as they are proof you have paid the tax.

Every year you must also file a tax return.

How to appeal/complain

If you disagree with your tax assessment, you can complain in writing to the local tax commissioner within 30 days of the assessment.

For details of exactly where and how, see your tax assessment letter.

If you are not satisfied with the tax commissioner's ruling you can appeal further to Yfirskattanefnd (Internal Revenue Board), within 3 months of the ruling.

Links

Iceland – Internal Revenue Directorate

Check also what your EU rights are.


I'm self-employed Choose country

Choose country

Common rights across EU countries


* Information not yet provided by national authorities

Which income will be taxed in Iceland?

  • Live in Iceland? (min. 183 days in a 12 month period) You must pay tax on your worldwide income there.

  • Lived in Iceland less than 183 days in a 12-month period? You are not considered tax resident and only pay tax on income earned in Iceland.

  • Income from other EU countries? Check you never pay tax twice on the same income.

How much will you pay?

Combined national and municipal income tax rates for 2011

Bracket

Annual income

Rate

1

up to ISK 229,999

0%

2

ISK 230,000 – 474,366

37.34%

3

ISK 474,367 – 704,366

40.24

4

over ISK 704,367

46.24%

When and how do you pay?

Before you start working in Iceland, you must apply for a tax card from the Internal Revenue Directorate.

Every year you must file a tax return.

How to appeal/complain

If you disagree with your tax assessment, you can complain in writing to the local tax commissioner within 30 days of the assessment.

For details of exactly where and how, see your tax assessment letter.

If you are not satisfied with the tax commissioner's ruling you can appeal further to Yfirskattanefnd (Internal Revenue Board), within 3 months of the ruling.

Links

Iceland - Internal Revenue Directorate

EU tax law - by country

Check also what your EU rights are.


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