Taxation Policy
Persons with unlimited tax liability
Unlimited liability means that owners can be held personally accountable for a business's debt.
The rate of income and municipal tax is calculated on three levels;
37.30 % for income between ISK 0 - 309.140 pr. month
39.74 % for income between ISK 309.141 - 836.404 pr. month
46.24 % for income exceeding ISK 836.405 pr. month
The above numbers apply after pension fund premium has been deducted from income.
Personal tax credit, which is ISK 50.902 pr. month, is deducted from calculated taxes.
If annual income is below ISK 1.637.601 no income or municipal income tax is to be paid.
Children under 16 years of age pay 6% of income exceeding ISK 180.000 pr. year.
A fee paid into the Construction Fund for the Elderly, ISK 10.159 and TV-licence tax of ISK 17.800 is levied on all individuals aged 16-69 with income above the aforementioned tax-free limits of ISK 1.624.603 in 2014.
Capital income tax is 20 % of capital income exceeding ISK 125.000 pr. year. Capital income tax of rental income is also 20%, but only 70% rental income are liable to tax.
The municipalities collect real estate tax on all real estate, which is a percentage of the building's and the lot's real estate evaluation, and that percentage is decided by each municipality.
(Information based off Nordisk eTax)
Unlimited liability means that owners can be held personally accountable for a business's debt.
The rate of income and municipal tax is calculated on three levels;
37.30 % for income between ISK 0 - 309.140 pr. month
39.74 % for income between ISK 309.141 - 836.404 pr. month
46.24 % for income exceeding ISK 836.405 pr. month
The above numbers apply after pension fund premium has been deducted from income.
Personal tax credit, which is ISK 50.902 pr. month, is deducted from calculated taxes.
If annual income is below ISK 1.637.601 no income or municipal income tax is to be paid.
Children under 16 years of age pay 6% of income exceeding ISK 180.000 pr. year.
A fee paid into the Construction Fund for the Elderly, ISK 10.159 and TV-licence tax of ISK 17.800 is levied on all individuals aged 16-69 with income above the aforementioned tax-free limits of ISK 1.624.603 in 2014.
Capital income tax is 20 % of capital income exceeding ISK 125.000 pr. year. Capital income tax of rental income is also 20%, but only 70% rental income are liable to tax.
The municipalities collect real estate tax on all real estate, which is a percentage of the building's and the lot's real estate evaluation, and that percentage is decided by each municipality.
(Information based off Nordisk eTax)
Persons with limited tax liability
The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event
The rate of income and municipal tax is calculated on three levels;
37.30 % for income between ISK 0 - 309.140 pr. month
39.74 % for income between ISK 309.141 - 836.404 pr. month
46.24 % for income exceeding ISK 836.405 pr. month
The above numbers apply after pension fund premium has been deducted from income.
Personal tax credit is ISK 1.673 pr. day and are calculated according to the residence day in the country.
Those with limited tax liability in Iceland does not have to pay a fee into the Construction Fund for the Elderly, or TV-licence tax.
(Information based off Nordisk eTax)
The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event
The rate of income and municipal tax is calculated on three levels;
37.30 % for income between ISK 0 - 309.140 pr. month
39.74 % for income between ISK 309.141 - 836.404 pr. month
46.24 % for income exceeding ISK 836.405 pr. month
The above numbers apply after pension fund premium has been deducted from income.
Personal tax credit is ISK 1.673 pr. day and are calculated according to the residence day in the country.
Those with limited tax liability in Iceland does not have to pay a fee into the Construction Fund for the Elderly, or TV-licence tax.
(Information based off Nordisk eTax)