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Tax rates 2018

Persons with unlimited tax liability

The rate of income and municipal tax is calculated on two levels; 
36,94 % for income between  ISK 0 - 893.713 pr. month
46,24 % for income exceeding ISK 893.714 pr. month

The above numbers apply after pension fund premium has been deducted from income.

Personal tax credit, which is ISK 53.895 pr. month, is deducted from calculated taxes.

If annual income is below ISK 1.750.782 no income or municipal income tax is to be paid.

Children under 16 years of age pay 6% of income exceeding ISK 180.000 pr. year.

A fee paid into the Construction Fund for the Elderly, and TV-licence tax is levied on all individuals aged 16-69 with income above the aforementioned tax-free limits.

Capital income tax is 22 %. Capital income tax on interest is 22% on interest income exceeding ISK 150.000 pr. year. Capital income tax of rental income is also 22%, but only 50% rental income are liable to tax.

The municipalities collect real estate tax on all real estate, which is a percentage of the building's and the lot's real estate evaluation, and that percentage is decided by each municipality.
 

Persons with limited tax liability

The rate of income and municipal tax is calculated on two levels;
36,94 % for income between ISK 0 - 893.713 pr. month
46,24 % for income exceeding ISK 893.714pr. month

The above numbers apply after pension fund premium has been deducted from income.

Personal tax credit is ISK 1.772 pr. day and is calculated according to the residence day in the country.

Those with limited tax liability in Iceland does not have to pay a fee into the Construction Fund for the Elderly, or TV-licence tax.

 

 

Tax rates 2017

Persons with unlimited tax liability

The rate of income and municipal tax is calculated on two levels; 
36,94 % for income between  ISK 0 - 834,707 pr. month
46,24 % for income exceeding ISK 834.708 pr. month

The above numbers apply after pension fund premium has been deducted from income.

Personal tax credit, which is ISK 52,907 pr. month, is deducted from calculated taxes.

If annual income is below ISK 1.718,678 no income or municipal income tax is to be paid.

Children under 16 years of age pay 6% of income exceeding ISK 180.000 pr. year.

A fee paid into the Construction Fund for the Elderly, and TV-licence tax is levied on all individuals aged 16-69 with income above the aforementioned tax-free limits.

Capital income tax is 20 % of capital income exceeding ISK 125.000 pr. year. Capital income tax of rental income is also 20%, but only 50% rental income are liable to tax.

The municipalities collect real estate tax on all real estate, which is a percentage of the building's and the lot's real estate evaluation, and that percentage is decided by each municipality.
 

Persons with limited tax liability

The rate of income and municipal tax is calculated on two levels;
36,94 % for income between ISK 0 - 834.707 pr. month
46,24 % for income exceeding ISK 834.708 pr. month

The above numbers apply after pension fund premium has been deducted from income.

Personal tax credit is ISK 1.739 pr. day and are calculated according to the residence day in the country.

Those with limited tax liability in Iceland does not have to pay a fee into the Construction Fund for the Elderly, or TV-licence tax.

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