Europe
Iceland: tax at a glance
Three-band progressive income tax to ~46.3%, a flat 22% capital-income tax, a 21% corporate rate, and 24% VAT.
Worldwide (residence-based)
Last verified
Ways to relocate to Iceland
The residency and citizenship routes that lead here, weighed against the tax picture above.
The taxes
- Personal income (top)
- 46.28%Progressive three bands; top ~46.28% (national 31.35% + municipal ~14.93%) on monthly income above ISK 1.25m.
- Corporate income
- 21%
- Capital gains
- 22%
- VAT / VSK (VAT)
- 24%
- Dividends (WHT)
- 22% (non-resident individuals); 20% for companies
- Interest (WHT)
- 12%
- Royalties (WHT)
- 22%
- Social security (employee)
- 4% (mandatory pension)
- Social security (employer)
- 6.35% social security charge plus about 11.5% pension
- Wealth tax
- None. A temporary levy expired in 2014.
- Inheritance / estate
- 10%, above an exemption of about ISK 6.79m
- Property tax
- Municipal property tax of about 0.18-1.65% of assessed value
How the system works
- Tax system
- Worldwide (residence-based)
- Foreign income
- Taxed (worldwide)
- Taxes by citizenship
- No
- Exit tax
- No
- CFC rules
- Yes
- CRS
- Participating
A special regime for new arrivals
Foreign expert incentive: only 75% of income is taxed for the first 3 years.
The rates below are indicative headline figures (top marginal, standard, and headline rates), reviewed 2026-07. Brackets, surcharges, and state, provincial or cantonal taxes vary. Treat this as a reference map, not advice.