Country tax profile · 2026
Iceland income tax
How Iceland taxes income
Iceland taxes personal income at rates up to 46.29%. Residents are taxed on worldwide income. A 3 year tail applies after emigrating.
Compiled by MyNomadWorld for Iceland and currently being re-verified against primary sources. Confirm with a local adviser before relying on it.
Iceland income tax brackets (2026)
| Taxable income | Rate |
|---|---|
| up to 5,977,464 ISK | 31.5% |
| up to 16,781,400 ISK | 38% |
| over the top bracket | 46.3% |
National brackets; local or regional surcharges may apply on top.
How Iceland's income tax compares
Iceland's top income tax of 46.29% is the 16th highest of the 197 countries we track, against a global average of 27.9% and a Europe average of 30.8%.
Countries with a similar income tax
Curaçao (46.5%) · Luxembourg (45.78%) · Spain (47%) · Norway (47.4%) · United Kingdom (45%) · Germany (45%)
Who is a tax resident of Iceland?
More than 183 days in any 12 month period from arrival, or a home in Iceland. A 3 year tail of liability applies after leaving, unless you can show you are taxed in another country.
Related Iceland taxes
Moving to Iceland?
Get matched with a vetted Iceland tax & immigration advisor who handles residency and the exit from your current country.
See advisors →Iceland income tax FAQ
What is the income tax rate in Iceland?
Iceland taxes personal income at rates up to 46.29%. Residents are taxed on worldwide income. A 3 year tail applies after emigrating.
Can expats pay less income tax in Iceland?
Yes. Under the Foreign expert incentive (25% exempt) regime, qualifying new residents pay about 30.0% instead of the 46.29% headline rate.