Do you live in Iceland and have interest income/ interest expenses in another Nordic country?

This applies to persons resident in Iceland who receive interest income from another Nordic country, or pay interest to a creditor in another Nordic country.

Interest income 

Interest income from another Nordic country is taxable in Iceland pursuant to the same rules that apply to interest income from an Icelandic source.

In this context, interest income means income from financial assets, including interest on bank deposits and bond unit trusts.

You do not pay tax on interest in the source country. If tax has by mistake been withheld at source in another Nordic country, you can request to have the amount refunded. Contact the tax authorities or the payer of interest for more information.

Interest expenses

If you are tax resident in Iceland you are entitled to deduct interest you pay on loans. This also applies to loans from abroad. Any interest paid to a foreign creditor must be documented when claiming the deduction in your tax return.

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