Iceland · Tax regime
Tax Discount for Foreign Experts
Open
Last verified July 2026
Open. 25% of income is excluded from the taxable base for the first 3 years. In practice, only 75% is taxed. Applications go through Rannís, the Icelandic Centre for Research.
Three years at 75% of the taxable base is modest by Nordic standards. Denmark gives seven years at 32.84%, and Finland gives seven at 25%. But Iceland has no wealth tax and only 22% capital gains, so the overall capital position is cleaner than the headline rate suggests.
Qualifying routes
—
Approved foreign expert
25% deduction from taxable income for 3 years; no salary threshold
The facts
- Total landed cost
- No fee. Worth roughly 11.5 percentage points off a 46.29% marginal rate for three years.
- Route type
- Tax regime, not a visa
- Timeline
- 1–3 months (Apply via Rannís within 3 months of starting work. This is a hard deadline.)
- Physical presence
- Icelandic tax residence and employment
- Family
- Individual to the employee
- Permanent residency
- Separate track
- Citizenship
- 7 years
- Language test
- Icelandic language test at roughly A2 level
- Dual citizenship
- Permitted
- Requirements
- Not resident or domiciled in Iceland during the 60 months prior.Expertise unavailable or scarce in Iceland.Work in R&D, innovation, teaching, specialised projects, project or construction management, or another key role.Application filed via Rannís within 3 months of starting work.
What can go wrong
- You must apply via Rannís within 3 months of starting work. Miss it and the relief is gone.
- Only 3 years, much shorter than Denmark's 84 months or Finland's 84 months.
- You must not have been resident or domiciled in Iceland during the 60 months prior. The first 3 months of the stay are not counted.
- Wage-related charges, child benefits and interest relief are still computed on TOTAL gross salary, not the reduced base. That makes the relief narrower than 25% in cash terms.
- The expertise has to be genuinely unavailable or scarce in Iceland. This applies to R&D and innovation, teaching, specialised projects, project or construction management, and other key roles.