Do you live in Iceland and intend to work as a self-employed person in another Nordic country?
This information concerns individuals who live in Iceland and intend to work as a self-employed person in another Nordic country. The information only pertains to the taxation of income from such operations.
Taxes in Iceland
You must declare and pay taxes from all your operations in Iceland. Taxes are levied on the income according to Icelandic law as you have unlimited tax liability in Iceland. It means that you must also declare the income from your operations which you have earned and declared in the other Nordic country.
If you are required to pay taxes in the other Nordic country, you must provide information about those tax payments in your tax return. When assessing taxes in Iceland, the taxes you have paid in the other Nordic country are taken into account.
In addition to the information that you are required to state on your tax return, you must file an operating summary (form RSK 4.11).
Are you also required to pay taxes in the other country?
The income from your operations in the other Nordic country is only taxed in that country if your permanent establishment is located there. However, only the part of the income from your operations that has its source at this permanent establishment will be taxed in that country. Taxation in the other country depends on the law of the country in question.
If you are a doctor, auditor, engineer or consultant (so-called free professions), you may also be liable to tax in the country in which you perform work, when you have stayed there for more than 183 days during a 12-month period. This applies even if you do not have a permanent establishment.
Definition of the term permanent establishment can be found in the chapter "General info/Permanent establishment".
Further information on taxation in the other Nordic country can be found by clicking on that particular country at the bottom of the page.
There are specific rules regarding where you are required to be insured. You must contact the Social Insurance Administration in Iceland (www.tr.is), or a similar institution in the country in which you intend to operate, for more detailed information on those rules.
Value added tax (VAT)
If you are operating as a self-employed person in another Nordic country, you might be required to register for VAT according to the VAT-law of the country in question. Further information on VAT in the other country can be found by clicking on that particular country at the bottom of the page.