Iceland

Iceland - Civil Law (German)
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Iceland taxes

If you want to do business in Iceland, you have to know about taxation for a LLC, which is the most common company type in Iceland.

Iceland taxes corporate income on a worldwide basis. The predominant approximate percentage for income earned abroad, from our research, and this is not personal tax advice, is 20%. IS doesn't have known exemptions to bring in foreign earned profits remitted back. Taxes are reasonable in Iceland because the income corporate tax rate is 20%. This ranks Iceland as 70th overall with regards to corporate tax rate worldwide.

The VAT rate in Iceland is 24.00%, that ranks Iceland as 168th when compared to value added tax rate worldwide. In terms of other taxation, an employer will contribute at least in 15.35% to the equivalent of a social security fund and an employee will contribute 4.00%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 60 hours. Contributing to this is the number of yearly labor tax payments, which is 13 in IS.

Thin cap rules are not officially enacted. This refers to any type of restrictions on companies' debt-to-asset ratios. Dividends paid to residents are subject to a withholding tax of 20%. However, tax may be reimbursed under certain requirements. Dividends are payments of company profits, passed by the board, to shareholders. Dividends can be issued as stock, cash, or property. Capital Gains are treated as ordinary income and subject to 20% corporate income tax. However, gains derived by a corporation from the sales of shares are not taxable. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 10%. This means that the tax authorities expects legal entities to automatically withhold 10% of interest payments to non-residents. The dividends withholding tax rate is 18%. Which means that the relevant tax authorities expects legal entities to automatically withhold 18% of dividend payments offshore. Withholding tax on dividends paid to EEA resident companies may be reimbursed. The royalties withholding tax rate is 20%. Which means that the relevant tax authorities expects entities to pay tax on at least 20% of money remitted abroad on royalty payments. Withholding taxes may be reduced under a tax treaty.
There is no known tax on wealth in Iceland. There are inheritance and real estate taxes in Iceland. We are aware of widely used research and development tax relief in this country.

The above is not tax or legal advice for your company situation. We are able to refer you to a tax advisor in Iceland who can properly advise you. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.

It takes approximately 40 hours to file and prepare documents for a Iceland Civil Law (German).
The corporate tax is approximately 20% which is 70 in the world.

Owners of a company in Iceland are not allowed to carry back a loss and may be allowed to carry forward a loss for 10 years.

The vat rate in Iceland is 24% which ranks 168 in the world.

Patent box
RND credit
Wealth tax
Estate tax
Transfer taxes
Asset taxes
Capital duties
85Tax treaties
20%Offshore Tax
20%Corp rate
-Loss carryback years
40Corporate time
24%VAT rate
20%Capital gains
2017AEOI planned

Read this to learn about incorporating a company in
Iceland

We can help you form a company in Iceland. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Iceland, which is required by law.

We can help you with your incorporations needs for an initial payment of just $1000.

Easy Step by Step Process:
The standard process typically takes between two (2) to three (3) weeks depending on when we receive all the required information from you. Once we receive your information, we will email you a complete set of documents for your review within 3 working days upon confirmation of payment. After executing the documents, you will need to mail them to us and we will formally submit your application for filing with the Registry. The Registry will then take about 3-8 working days to process the incorporation and produce certificates necessary for opening your bank account.

Applying for Your Bank Accounts:
Incorporations.IO maintains close working relationship within our extensive network of partner banks to help you apply for and receive banking services that are most appropriate to your specific situation. From the time of verification of incorporation it can take (1) one week to (2) two weeks to apply for and receive a bank account. We work primarily with banks that allow for remotely opened accounts to ensure you are ready to do business as soon as possible.

Applying for Payment Processing:
We include introductions to payment processors or merchant accounts with all of our incorporation services. Whether you just need standard credit card processing or specialized services for high risk processing, we have partners that can assist you and are happy to help you with introductions that can empower your business.

Start Online or via Phone:
We can get started for you whenever you are ready via a US$1000 initial payment via credit card. I get notified whenever a payment is made here and would send out the welcome letter and initial forms we would need within 12 hours. If you prefer, we can also process via a phone or Skype call.

Iceland Tax Treaties

CountryTypeDate signed
Switzerland
DTC 2014-07-10
Norway
DTC 1989-12-07
Canada
DTC 1997-06-19
Lithuania
DTC 1998-06-13
Cayman Islands
TIEA2009-04-01
Greenland
TIEA1989-12-07
South Korea
DTC 2008-05-15
Spain
DTC 2002-01-22
China
DTC 1996-06-03
Saint Kitts and Nevis
TIEA2010-03-24
Russia
DTC 1999-11-26
Latvia
DTC 1994-10-19
Curacao
TIEA2009-09-10
Grenada
TIEA2010-05-19
Mexico
DTC 2008-03-11
Marshall Islands
TIEA2010-09-28
Macao
TIEA2011-04-29
United Kingdom
DTC 2013-12-17
Belize
TIEA2010-09-15
Germany
DTC 1971-03-18
Uruguay
TIEA2011-12-14
Brunei
TIEA2012-06-27
Barbados
DTC 2011-11-03
Monaco
TIEA2010-06-23
Cook Islands
TIEA2009-12-16
Croatia
DTC 2010-07-06
Estonia
DTC 1994-06-16
San Marino
TIEA2010-01-12
Finland
TIEA1989-12-07
Montserrat
TIEA2010-11-22
Aruba
TIEA2009-09-10
Liechtenstein
TIEA2010-12-17
Hong Kong
TIEA2014-08-22
Saint Lucia
TIEA2010-05-19
Niue
TIEA2013-10-16
India
DTC 2007-11-23
Albania
DTC 2014-09-26
Isle of Man
TIEA2007-10-30
Liberia
TIEA2010-11-10
Guernsey
TIEA2008-10-28
Botswana
TIEA2013-02-20
Vietnam
DTC 2002-04-05
Qatar
TIEA2013-09-06
Hungary
DTC 2005-11-23
Bahamas
TIEA2010-03-10
Turks and Caicos Islands
TIEA2009-12-16
Jamaica
TIEA2012-12-04
Guatemala
TIEA2012-05-15
Romania
DTC 2007-09-19
Czech Republic
DTC 2000-01-18
Portugal
DTC 1999-08-02
Ukraine
DTC 2006-11-08
Andorra
TIEA2010-02-24
Slovenia
DTC 2011-05-04
Slovakia
DTC 2002-04-15
Sweden
TIEA1989-12-07
Panama
TIEA2012-11-12
Malta
DTC 2004-09-23
Bahrain
TIEA2011-10-14
Bermuda
TIEA2009-04-16
Cyprus
DTC 2014-11-13
Samoa
TIEA2009-12-16
Greece
DTC 2006-07-07
Kazakhstan
DTC 1994-10-19
Luxembourg
DTC 1999-10-04
Italy
DTC 2002-09-10
Dominica
TIEA2010-05-19
Faroe Islands
TIEA1989-12-07
Antigua and Barbuda
TIEA2010-05-19
Seychelles
TIEA2011-03-30
Vanuatu
TIEA2010-10-13
Poland
DTC 1998-06-19
France
DTC 1990-08-29
Anguilla
TIEA2009-12-14
Jersey
TIEA2008-10-28
Costa Rica
TIEA2011-06-29
Belgium
DTC 2000-05-23
Denmark
TIEA1989-12-07
Netherlands
DTC 1997-09-25
Mauritius
TIEA2011-12-01
United States
DTC 2007-10-23
Saint Vincent and the Grenadines
TIEA2010-03-24
Sint Maarten
TIEA2009-09-10
Gibraltar
TIEA2009-12-16
Ireland
DTC 2003-12-17

Country Info

National Flag of
Ísland (isl)
Currency
ISK
Area Code
+354
Capital
Reykjavik
Region
Northern Europe
Native Languages
Icelandic