Einstaklingsrekstur, sole proprietorshipIceland
What it takes to form, own and run a sole trader in Iceland, and how its profit is taxed. Each figure links to the page it was read from.
This company type
At a glance
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The owner bears full and unconditional liability for all commitments entered into by the business.
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A sole proprietorship is registered on the owner's national ID number.
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Self-employed individuals, however, pay a tax rate of 36.94% in the lower bracket and 46.24% in the upper bracket.
Form it
Who registers it
- Registry
- Formed without visiting
- Not stated
The registry’s and the law’s own pages do not mention it.
- Formed online
- Not stated
The registry’s and the law’s own pages do not mention it.
What it takes to form
Not in our records A notary, A resident director, Paying up the capital: none of these is in our records for the Einstaklingsrekstur, sole proprietorship.
Own it
Who may own and run it
- Directors
- Does not apply
- Shareholders
- Does not apply
- Members
- At least 1 · at most 1 · one person may form it alone
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A sole proprietorship is registered on the owner's national ID number.
- A local company secretary
- Does not apply
- A local registered agent
- Does not apply
Each year, at the registry
- Annual registry fee
- Not stated
The registry’s and the law’s own pages do not mention it.
- Accounts on the public record
- No
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Einstaklingar þurfa að skila ársreikningum ásamt sérstöku rekstrarframtali með skattframtali sínu
- Audit for a small company
- Does not apply
- Audit
- Not in our records
Important dates
When each obligation falls due, as the authority states it.
Not in our records No dates for the Einstaklingsrekstur, sole proprietorship are in our records.
What is public
Not in our records What the register shows the public is not in our records for the Einstaklingsrekstur, sole proprietorship.
Tax
Tax on profit
How this company type is taxed, which can differ from its place’s headline rate.
Through owners · 36.94–46.24%
Self-employed individuals are taxed personally: island.is gives 36.94% in the lower bracket and 46.24% in the upper bracket (personal income tax, not corporate tax).
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Self-employed individuals, however, pay a tax rate of 36.94% in the lower bracket and 46.24% in the upper bracket.
- CFC rules in Iceland
- Not in our records
Close it
Closing it
The other end, which most guides leave out.
Not in our records Route, Statutory fee: none of these is in our records for the Einstaklingsrekstur, sole proprietorship.
Every business in Iceland
VAT
- 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
Payment and banking services
4 services name Iceland on their own list: Paysera, Airwallex, Revolut, N26. Each provider, and what a listing means.
Reference
Its name and code
- Kind
- Sole traderDerived our grouping, the same words in every country
- Name in law
- Einstaklingsrekstur, sole proprietorship
- Identifier
- IS-SOLE-TRADERA form ISO 20275 does not list.