close
Share with your friends

Iceland: Legislation providing economic and tax relief (COVID-19)

Iceland: Legislation providing economic and tax relief

Parliament on 30 March 2020 passed two different legislative acts as relief measures in response to the coronavirus (COVID-19) pandemic.

1000

Related content

In general, the first of the two legislative acts is intended to mitigate the economic effects of the coronavirus. The second is a supplementary budget act.

Previously parliament enacted three other laws regarding:

  • Increased right to unemployment benefits for part-time employees
  • Individuals who are quarantined with no signs of being infected, were guaranteed income
  • Postponement of payment deadlines for social security tax and withheld public levies at source


Postponement of payment deadlines for certain taxes

Employers can elect to postpone the payment deadlines of up to three payments of social security tax and withheld public levies at source that fall due between 1 April 2020 and 1 December 2020. The payment deadline for all postponed payments will be 15 January 2021.

The payment deadline for payments previously postponed from 1 March 2020 to 1 April 2020, will be postponed even further till 15 January 2021. There are conditions to be satisfied to invoke the right to the postponement, such as substantial operational difficulties in 2020 due to immediate and unforeseen loss of income, directly or indirectly caused by the COVID-19 outbreak (among other conditions).

  • Similarly, and subject to conditions, payers of real estate taxes on business property can postpone up to three tax payments.
  • The Minister of Finance and Economic Affairs has been authorized to issue regulations to reduce or suspend the prepayment of income tax for the income of 2019, and there may be a new payment deadline for prepayments.
  • Currently the deadlines for value added tax (VAT) are not being postponed. However, there are guidelines indicating that the Icelandic tax authorities will not impose penalties if VAT payments are not made before the deadline on 6 April 2020, for the reporting period of January and February 2020.


Read an April 2020 report [PDF 211 KB] prepared by the KPMG member firm in Iceland

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal