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Iceland - Overview and introduction

Iceland - Overview and introduction

Taxation of international executives

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In Iceland, all employees are subject to state and municipal income taxes. Residents are also subject to contributions to the Construction Fund for the Elderly and a specific charge to the Icelandic National Broadcasting Service.

Residents are taxed on worldwide income but can apply for credit for taxes paid to other countries/jurisdictions. Non-residents are taxed on Icelandic-source income only.

Income earned in the 2019 calendar year is assessable in the 2020 taxation year.

The official currency of Iceland is the Icelandic krona (ISK).

Herein, the host country/jurisdiction refers to the country/jurisdiction to which the employee is assigned. The home country/jurisdiction refers to the country/jurisdiction where the assignee lives when they are not on assignment.

 

Disclaimer

All information contained in this publication is summarized by KPMG Tax and Legal Advisers, an Icelandic limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The information contained in this publication is based on  the Icelandic Income Tax Act no. 90/2003, and subsequent amendments; the Icelandic Act on the Withholding of Public Levies at Source no. 45/1987, and subsequent amendments; the Web site of the Icelandic Directorate of Internal Revenue; the Icelandic Social Insurance Act no. 100/2007, and subsequent amendments; the Web site of the Icelandic Social Insurance Administration.

© 2021 KPMG ehf, an Iceland Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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