Are you living in Iceland and receiving social security benefits from another Nordic country?
This information applies to you who are living in Iceland and receiving social security benefits from another Nordic country. The information only pertains to the taxation of social security benefits. If you are receiving pension payments from another Nordic country, please see pension.
Taxation in the source country
Social security benefits that are paid from another Nordic country may be liable to taxation in the source country.
Taxation in Iceland
You must declare the benefits on your Icelandic tax return under "Income from abroad ". The general rule is that benefit payments are liable to taxation in the source country. During tax assessment in Iceland, benefits paid from another Nordic country during the income year in question are taken into consideration. Taxes are levied on all income, both Icelandic and foreign, but then lowered according to the foreign incomes percentage of the total income.