Iceland
Iceland: 4 company types, its taxes, banking and business environment.
Forming a company
Company types in Iceland
The 4 forms a founder can choose here, each with its own figures. Open one for its sources.
Doing business here
Business accounts
Providers whose own published list of countries names Iceland. A listing means a company formed here may apply, not that it will be accepted.
Not in our records No provider's country list has been read for Iceland.
EU listings
Two lists a bank checks when it opens an account for a company or its owner.
- EU high-risk third countries (AML)
- Not listed
- EU non-cooperative jurisdictions for tax purposes
- Not listedOfficial EUR-Lex, 52026XG01465, Annex I as of 2026-02-17
Official sites
The authorities’ own sites for Iceland: where to register, file and check.
Blocs and agreements
The trade arrangements Iceland belongs to, as each arrangement’s own texts state them: since when, and what each covers. What a membership means for a business is for you to judge.
- Schengen area
- Free movement area · since 25 March 2001
Covers movement of people.
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As from 25 March 2001, and subject to Article 3(2):
- European Economic Area
- Single market · since 1 January 1994
Covers goods, movement of people, services, establishment, capital.
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which now covers the EU and its 27 Member States, and three of the four EFTA members: Norway, Iceland and Liechtenstein.
- European Free Trade Association
- Free trade area · since 1970
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Iceland becomes a member of EFTA.
Regional and customs arrangements only, 36 of them; bilateral trade agreements are not yet in our records.
Tax
Company tax
Tax, and what the company owes the registry each year.
- Corporate income tax
- 20%
- Distributions
- Not in our records
- Audit
- Not in our records
- Small-company relief
- Not in our records
- Annual obligations
- Not in our records
- Annual registry fee
- Not in our records
VAT
The tax on what the company sells in Iceland, and when it must register, as the tax authority states it.
- Standard rate
- 24%
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The standard rate of VAT in Iceland is 24%.
- Other rates
- 11% Rental of hotel and guestrooms and other commercial accommodation, campgrounds, catering and sale of food, alcohol, travel agents and tour operators, passenger transport, and self-employed guides
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The reduced rate of VAT in Iceland is 11% and applies to the sales of following goods and services
- Registration threshold
- ISK 2,000,000 · about €14,684
sales of taxable goods and services; each twelve-month period from the beginning of business activity
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Exempt from the obligation to register for VAT are those who sell labor and services that are exempt from VAT and those who sell taxable goods and services for 2.000.000 ISK or less in each twelve-month period from the beginning of their business activity
- A foreign company
- The same threshold applies; needs a local tax representative
A foreign business selling taxable goods and services in Iceland is liable on the same terms as an Icelandic company and registers when the conditions are met. One selling taxable services without a permanent establishment in Iceland must entrust an agent domiciled in Iceland to act as its representative, collect the VAT and remit it.
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Foreign taxable persons selling taxable goods and services in Iceland are liable for VAT according to the same rules and regulations as Icelandic companies and shall be registered for VAT if the conditions for registration are met.
- Returns filed
- Depends on the business
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In general each VAT settlement period is two months
- Tax authority
- Registration page read 2026-10-22
Tax calendar
When the main returns and payments fall due in Iceland, tax year 2025, as the tax authority states it.
- Corporate tax return
- 21 September · each year
The general deadline for corporate returns is 31 May, with extensions available on application; the final deadline for the 2025 financial year is 21 September 2026, stated by Skatturinn in its news item. The rule records the final date for the year this record covers.
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Please note that the final deadline for legal entities to submit their 2026 tax return, for the 2025 financial year, is 21 September.
- Corporate tax, final payment
- Set each year by decree · each year
Skatturinn's 2026 guide to the legal-entity assessment says the advance payments take eight due dates in 2026 and the balance is split over two due dates, 1 November and 1 December. These are due dates (gjalddagar); the guide adds that unpaid amounts fall due as eindagi a month after the due date, but not earlier than a month after the assessment is completed. The 2026 dates are the ones recorded.
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Gjalddagar fyrirframgreiðslu á árinu 2026 eru átta. Eftirstöðvum gjalda er jafnað á tvo gjalddaga, 1. nóvember og 1. desember.
- Corporate tax, instalments
- Set each year by decree · each month
Icelandic: 'Fyrirframgreiðslur eru 68% af álagningu síðasta árs. Þær dreifast jafnt á 8 mánuði frá febrúar til september' — advance payments are 68% of last year's assessment, spread evenly over eight months from February to September. The tax calendar gives the eight dates for 2026 (27 February, 31 March, 30 April, 29 May, 30 June, 31 July, 31 August, 30 September), which the rule lists.
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27.2.2026 Eindagi skoðunargjalds vinnueftirlits Fyrirframgreiðsla þinggjalda lögaðila 1/8
- Personal income-tax return
- 13 March · each year
The 2026 return, for income year 2025, had its deadline on 13 March; the return is pre-filled and filed on Skatturinn's service portal. Skatturinn's calendar also shows 16 March as the last day for returns filed through an agent.
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The deadline for completing the tax return was March 13th.
- Personal income tax, final payment
- Set each year by decree · each year
Skatturinn's 2026 assessment-notice page for individuals says the balance of the assessed charges is split over seven due dates, 1 June to 1 December, and that a taxpayer may ask on filing to settle the whole assessment on 1 June. The regulation on collection of public charges in 2026 (Stjórnartíðindi) sets due dates on the first day of each month except January and the month in which the assessment is completed, which gives the seven monthly dates recorded.
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Eftirstöðvum álagðra gjalda er jafnað á sjö gjalddaga, 1. júní - 1. desember.
- Personal income tax, instalments
- Not required here
Iceland collects individuals' income tax by monthly withholding at source rather than by advance payments: 'Þeir sem greiða laun til starfsmanna og reikna sér laun í rekstri (reiknað endurgjald) ber almennt að halda eftir og standa skil á staðgreiðslu tekjuskatts og tryggingagjalds' — those who pay wages are generally obliged to withhold income tax and the social contribution and remit them. The annual return then settles the year; no separate advance-payment obligation for individuals is published.
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Þeir sem greiða laun til starfsmanna og reikna sér laun í rekstri (reiknað endurgjald) ber almennt að halda eftir og standa skil á staðgreiðslu tekjuskatts og tryggingagjalds.
- VAT return
- Day 5 of the following month · every two months
Icelandic: 'Gjalddagi virðisaukaskatts er einum mánuði og fimm dögum eftir lok hvers almenns uppgjörstímabils. Til dæmis er gjalddagi vegna janúar og febrúar 5. apríl' — the VAT due date is one month and five days after the end of each standard two-month period, e.g. 5 April for January-February, which is the 5th of the second month after the period ends. The same page states that a due date falling on a weekend or public holiday moves to the next working day.
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Gjalddagi virðisaukaskatts er einum mánuði og fimm dögum eftir lok hvers almenns uppgjörstímabils. Til dæmis er gjalddagi vegna janúar og febrúar 5. apríl.
- Payroll withholding
- Day 1 of the following month · each month
Icelandic: 'Gjalddagi er 1. dagur næsta mánaðar á eftir launamánuði og eindagi 15. hvers mánaðar' — the due date is the first day of the month after the pay month, with final settlement on the 15th. The rule records the due date; the 15th is the date after which default interest runs.
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Gjalddagi er 1. dagur næsta mánaðar á eftir launamánuði og eindagi 15. hvers mánaðar.
Running the company
Running a company here
Not in our records The authorities’ pages on running a company have not been read for Iceland yet.
Economy and trade
What it exports
Goods Iceland exported, by product, as a share of its goods exports each year. Exports include goods passing through for re-export. A share describes Iceland’s own trade; it does not compare places.
| Product (HS heading) | 2022 | 2023 | 2024 | Value, 2024 |
|---|---|---|---|---|
| Unwrought aluminium HS 7601 | 36.0% | 32.4% | 31.6% | US$2.5 bn |
| Fish fillets and other fish meat (whether or not minced), fresh, chilled or frozen HS 0304 | 14.6% | 14.9% | 15.3% | US$1.2 bn |
| Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304 HS 0302 | 6.0% | 5.4% | 6.2% | US$490 m |
| Orthopaedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability HS 9021 | 1.9% | 4.3% | 6.0% | US$473 m |
| Fish, frozen, excluding fish fillets and other fish meat of heading 0304 HS 0303 | 4.4% | 5.7% | 4.6% | US$367 m |
| Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products; cell cultures, whether or not modified HS 3002 | 0.45% | 1.1% | 3.5% | US$277 m |
| Aluminium wire HS 7605 | 3.8% | 3.4% | 3.1% | US$248 m |
| Flours, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves HS 2301 | 3.7% | 3.7% | 3.0% | US$238 m |
| Fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified HS 1504 | 2.9% | 3.2% | 2.9% | US$227 m |
| Ferro-alloys HS 7202 | 4.4% | 3.2% | 2.4% | US$190 m |
Total goods exports, 2024: US$7.9 bn. The ten largest headings are shown.