Tax rates
In Iceland, for withholding, the national income tax is calculated for individuals on all income other than capital income at the rate of 24,1%, and municipal income tax at 13,1%; however, the final assessment of municipal income tax is decided by each municipality independently and can range from 11.24% to 13.28%.
The personal exemption is calculated as ISK 506.466 and the fishermen's exemption as ISK 987 per day.
For annual income below ISK 1.361.467 no national or municipal income tax shall be paid.
A fee paid into the Construction Fund for the Elderly, ISK 7.103, is assessed for all individuals aged 16-69, who have income above the tax-free level.
There is a 10% capital income tax.
The income-tax rate for those in Iceland with limited tax liability is either 10% or 15%, with no personal exemption, depending on the type of income. For them final municipal income tax is calculated as it is for withholding, 13,1% in 2009.
The municipalities collect real-estate tax on all real estate that is a percentage of the building and plat's real estate assessment, and the percentage is decided by each municipality independently. Real-estate tax ranges from 0.180% to 0.625%. Click here to see the real-estate tax rate in your municipality . Along with the real-estate tax, other real-estate fees are collected, such as the plat lease, garbage collection tax, water use tax, etc.
| Income tax |
24,1% |
| Municipal income tax |
11.24%-13.28% |
| Personal exemption |
506.466ISK |
| Fisherman's exemption |
ISK 987 per day |
| Fee for the Construction Fund for the Elderly |
7.103 ISK |
| Capital income tax |
10% |
| National income tax - limited tax liability |
10%-15% |
| Real-estate tax |
0.180%-0.625% |
| Value-added tax |
24.5% |
|
Value-added tax on food |
7.0% |