Iceland

Iceland's Rankings
CategoryRankScore
Overall Rank3253.72
Corporate Taxes1365.61
Individual Taxes3640.15
Consumption Taxes1966.98
Property Taxes2749.48
Crossborder Taxes3161.76

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

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