Low Corporate Taxes in Iceland
Iceland has systematically made its positive business environment increasingly attractive. The Icelandic tax system is simple and efficient. The emphasis has been on simplifying it further, reducing tax rates, broadening the tax base and concluding additional double-taxation treaties. Corporate income tax rate is among the lowest within the OECD.
Tax Benefits and other Advantages of the Icelandic Fiscal System
- Corporate income tax only 15% on net income
- No taxes levied by municipalities on corporate profits
- Participation exemption available to domestic legal entities.
- No alternative minimum tax
- No net wealth taxes levied on net capital
- Tax incentives available for film production in Iceland
- Dividends received by corporations are deductible. No requirements are made for percentage of stock ownership in the corporate payer.
- Consolidated returns available for corporations subject to 90% common control
- Accounting in foreign currencies allowed
- Publicly traded companies are allowed to issue their share capital in a foreign currency
- Non-publicly traded companies are allowed to issue their share capital in a foreign currency if certain requirements are met
- No branch profits tax levied on repatriated branch profits
- Double taxation treaties available
- Tax credit available to avoid double taxation in the absence of tax treaties
- No specific legislative restraints on controlled foreign corporations
- No legislation on thin capitalisation
- No “basket system” (the US system)
- Easy and inexpensive establishment of companies
- Developed financial and service sector
- Iceland is part of the European Single Market as a member of the 30-nation European Economic Area
- International exhibitions and conferences
- Broad range of office and residential accomodation
- Advanced infrastructure for telecommunications networks and services