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Last checked : 10/09/2018

Income taxes abroad – Iceland

I'm an employee

Which income will be taxed in Iceland?

  • Living in Iceland for at least 183 days in a 12-month period? You must pay tax on your worldwide income there.
  • Living in Iceland for 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 2018

Bracket

Monthly income

Rate

1

up to ISK 893.713

22,5%

2

over ISK 893.713

46,24%

When and how do you pay?

Every year you must file a tax return.

Your payslip 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?

  • Living in Iceland for at least 183 days in a 12-month period? You must pay tax on your worldwide income there.
  • Living in Iceland for 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 2018

Bracket

Monthly income

Rate

1

up to ISK 893.713

22,5%

2

over ISK 893.713

46,24%

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.

See main information on this topic

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