Iceland income tax

Iceland tax calculator

Enter your income to estimate what you would pay in Iceland, as an employee or running your own company, and see the best-value cities. Get the full breakdown plus a vetted advisor by email.

How much is income tax 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.

Compiled by MyNomadWorld for Iceland and currently being re-verified against primary sources. Confirm with a local adviser before relying on it.

Iceland digital nomad visa

Long-term visa for remote work (repealed May 2026; replaced by short-term residence permit)

• Income requirement: Historic requirement ISK 1,000,000/mo (~€6,700), or ISK 1,300,000 (~€8,700) with spouse. Provision repealed by Visa Act No. 37/2026; new short-term residence permit's income figure not yet published
• Initial length: 6 months
• Max stay: Was 90-180 days, issuable once per 12-month period; no kennitala, no local work. Provision REPEALED mid-2026; new short-term residence permit (>90 days) replaces it, details pending
• Tax on nomad income: No local income tax if stay under 183 days (not tax resident); income remains foreign-taxed
• Family / dependents: Yes

Official source: Long-term visa for remote work (repealed May 2026; replaced by short-term residence permit) · as of 2026

Iceland expat & digital-nomad tax regime

Under the Foreign expert incentive (25% exempt) regime, a qualifying new resident or foreign-income remote worker pays an effective rate of about 30% instead of the 46.29% headline. This benefit is temporary or conditional (it runs for a limited period or requires you to stay non-resident), so treat it as a head start, not a permanent zero.

Official source: Iceland Revenue (skatturinn.is)

Capital gains, wealth & property tax

• Capital gains: 22% (capital income tax, separate from the employment band)
• Wealth tax: No net wealth tax.

Inheritance & gift tax in Iceland

A flat 10% rate; the first ISK 6,789,790 is exempt. Spouse exempt; children pay 10% on whatever exceeds the exempt threshold.

Corporate tax & VAT

The standard corporate profits tax is 20%.

How to become 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.

Banking in Iceland

You will want a local or multi-currency account for rent, bills and getting paid. See our guide to the best banks in Iceland.

For receiving income and moving money the day you arrive, Wise lets you hold and convert 40+ currencies and get paid like a local. Open a free Wise account →

Wise link is an affiliate link; we may earn a commission at no cost to you.

Iceland tax treaties

Iceland maintains around 47 double taxation treaties in force. They generally follow the OECD Model Convention and reduce withholding tax on cross-border dividends, interest and royalties, so the same income is not taxed twice when you move, invest or earn across borders. That is a broad network, useful for internationally mobile earners and investors.

Major treaty partners

Chips with a link open the full withholding-tax detail for that treaty pair.

Approximate size of the DTA network; confirm the specific treaty and its terms before relying on it.

Iceland tax treaty guides

Detailed double-tax-treaty guides (withholding rates on dividends, interest and royalties) are available for 7 of Iceland's partners:

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