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Iceland – COVID-19: Social Security and Payroll Tax Deferrals

Iceland – Social Security and Payroll Tax Deferrals

Iceland’s Parliament, on 30 March 2020, passed relief measures in response to the coronavirus (COVID-19) pandemic. Among the measures aimed at mitigating the economic effects of the coronavirus were extensions of time to pay social security tax and withheld public levies at source.

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Iceland’s Parliament, on 30 March 2020, passed relief measures in response to the coronavirus (COVID-19) pandemic.1 Among the measures aimed at mitigating the economic effects of the coronavirus were extensions of time to pay social security tax and withheld public levies at source.

For the full report, see “Summary of Icelandic Government’s Measures in Relation to the Economic Effect of COVID-19” (2 April 2020), a publication of the KPMG International member firm in Iceland. 

WHY THIS MATTERS

Iceland’s government efforts to mitigate the economic effects of the global coronavirus outbreak have been numerous and diverse.2 These actions are intended to help ensure the livelihood of people and companies and offset the economic effects of the virus.

The steps taken to delay the tax payment deadlines generally give companies an opportunity to preserve their cash-flow and additional time to address the disruption caused to normal business operations and processes.

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.

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).

The deadline for payments that had previously been postponed from 15 March 2020 to 15 April 2020, has been further postponed to 15 January 2021.

The information contained in this newsletter was submitted by the KPMG International member firm in Iceland.

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© 2020 KPMG hf, an Iceland limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. 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.

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