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Updated : 13/01/2016

Income taxes abroad – Iceland

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* Information not yet provided by national authorities

I'm an employee

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 2016

Bracket

Annual income

Rate

1

up to ISK 336,035

37.13%

2

ISK 336,036 – 836,990

38.35%

3

over ISK 836,991

46.25%

When and how do you pay?

Every year you must file a tax return.

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

More information: Internal Revenue Directorate

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

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 2016

Bracket

Annual income

Rate

1

up to ISK 336,035

37.13%

2

ISK 336,036 – 836,990

38.35%

3

over ISK 836,991

46.25%

When and how do you pay?

Every year you must file a tax return.

Keep all your invoices and make sure your accounts are updated – they can be checked by tax authorities.

More information: Internal Revenue Directorate

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.

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