Taxes and Finances

Fjármál og skattar

• Everyone with tax liability in Iceland must pay tax on taxable income arising from sources such as wages, fees, cash payments, sickness allowance etc. Wage earners must also pay into a pension fund, which is paid out at retirement age.
• Income tax and municipal tax are usually withheld by the employer who pays the tax deducted from the salary to the collector for the Treasury. Those who are self employed (such as contractors) are liable to pay the taxation themselves.
• It is important to have a bank account in Iceland. In most cases salaries are deposited directly on to a bank account and so it is important to have created an account with one of the banks in Iceland.
• More detailed information about finances on the information website Island.is

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Detailed information about taxes and tax returns can be found on the Directorate of Internal Revenue’s website (Ríkisskattstjóri) in ten languages