Accounting and legal

Accounting and tax

    Legal obligations and taxation in Iceland

  1. Corporate income tax is set at 20% for both resident and non-resident companies;
  2. A non-resident company is taxed only on its Iceland based income while a resident company is taxed on its worldwide income;
  3. The standard VAT rate on goods is 25.5% and must be filed on a bi-monthly basis. This excludes export goods, which are 100% VAT exempt;
  4. A company with net operating losses may carry them forward for up to 10 years;
  5. Withholding taxes of flat 20% are levied on i) dividends ii) interests and iii) royalties. Furthermore, foreign branches in Iceland suffer no remittance tax;
  6. Iceland tax returns must be filed by the 31st of May, unless the company chooses individual tax year;
  7. Capital gains from non-business property and disposition of shares are taxed as an investment income, with progressive rate from 22.9% to 31.8%;
  8. Social security contributions on all employee wages is levied at 7.6%;
  9. Personal taxation is progressive in nature and ranges between 37% and 46%;
  10. Iceland has signed over 40 double taxation and tax information exchange treaties, with countries including France, Canada and UK;
  11. Finally, Healy Consultants will assist the Client with: i) Documenting and implementing accounting procedures ii) Implementing financial accounting software iii) Preparing financial accounting records iv) Preparing forecasts, budgets, sensitivity analysis and other services;
  12. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Contact us

For additional information on our accounting and tax services in Iceland, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, , directly:
Government offices of Iceland Iceland Chamber of Commerce Iceland Ministry of Finance and Economic Affairs Iceland Ministry for Foreign Affairs Invest in Iceland The Central Bank of Iceland