Iceland
| Category | Rank | Score |
|---|---|---|
| Overall Rank | 32 | 53.72 |
| Corporate Taxes | 13 | 65.61 |
| Individual Taxes | 36 | 40.15 |
| Consumption Taxes | 19 | 66.98 |
| Property Taxes | 27 | 49.48 |
| Crossborder Taxes | 31 | 61.76 |
Iceland ranks 32nd overall on the 2021 International Tax Competitiveness Index, two spots worse than in 2020.
Strengths
- Iceland's corporate tax rate of 20 percent is below the OECD average of 22.9 percent, and the tax treatment of investments is one of the best in the OECD.
- Corporate, consumption, and labor taxes are less complex than they are on average in the OECD.
- Iceland has a territorial tax system that fully exempts foreign dividends and capital gains with no country limitations.
Weaknesses
- Companies are severely limited in the amount of net operating losses they can use to offset future profits, and companies cannot use losses to reduce past taxable income.
- The VAT of 24 percent applies to a relatively narrow tax base.
- Iceland's Controlled Foreign Corporation rules apply to both passive and active income.
Learn more about the tax system in Iceland