Iceland Withholding tax rates
Iceland Withholding tax rates: no single figure applies. The reason is set out below, cited to the governing instrument. Last checked against the official source on 11 Aug 2026.
The withholding taxes Iceland levies on payments to non-residents - dividends, interest and royalties at recipient-dependent rates - each at its domestic statutory rate before any double-tax agreement relief. Administered by Iceland Revenue and Customs (Skatturinn) under the Income Tax Act no. 90/2003 and the withholding acts no. 45/1987 and 94/1996.
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| Current value | structured — see the API |
|---|---|
| In force from | 2025-01-01 |
| Official source | Skatturinn, per-topic English pages: Non-resident - 'Dividends paid by resident companies to non-residents individual shareholders are subject to a final withholding tax at a rate of 22%'; Dividends (companies) - 'Non-resident companies pay 20% (except for 2024 then the percentage is 21%) withholding tax on dividends'; Interests - 'Interest income tax rate is 12% except for 2024, then it is 13%' |
| Last verified | 2026-08-11 |
| Verification | secondary — Corroborated, but the primary instrument was NOT read (usually the publishing host blocks automated access). DOWNGRADED BECAUSE THE 20% CORPORATE ROYALTY RATE CONFLICTS WITH THE STATUTE. The PwC citation previously carried on the royalties-corporate entry has been replaced with Skatturinn's own 'Limited tax liability' page, which does state 'The tax percentage is 20% for companies' for Article 3.6 (royalties/lease/patents/rights/know-how). However, the consolidated text of the Income Tax Act (Lög nr. 90/2003 um tekjuskatt, Althingi Lagasafn) says otherwise: 70. gr. 6. tölul. reads 'Tekjuskattur aðila sem um ræðir í 6. tölul. 3. gr. skal vera 22% af tekjum' - a FLAT 22%, applying to 'aðila' generally, with NO individual/legal-entity split, unlike 5., 7., 8. and 10. tölul. which all split a-liður (menn) from b-liður (lögaðilar). The 22% was substituted for 20% by Lög nr. 96/2017, 5. gr., in force from the 2018 income year; the 2024 one-year corporate surcharge (bráðabirgðaákvæði LXXVI, L. 100/2023) lists 3., 4., 5., 7., 8., 10. and 11. tölul. of 70. gr. but pointedly NOT 6. tölul., consistent with 6. tölul. having no company-specific rate to surcharge. Skatturinn's English page also states individuals under Article 3.6 pay '34,94% income tax in the income year 2026 (including municipal tax)', which is 20% + the 14.94% average municipal rate - i.e. the same pre-2018 20% base, and the same figure the page gives for Article 3.2 (pensions/directors' fees, where 70. gr. 2. tölul. genuinely is 20%). The page appears to have had its YEAR refreshed without its PERCENTAGES being updated for L. 96/2017. Skatturinn's other English page ('Non-resident') correctly gives 22% for royalties to non-resident individuals. The served 20% for non-resident companies is therefore probably stale by eight years and the statutory figure is 22%; the value has NOT been changed here because changing a served value is out of scope for a citation repair. |
| Provenance | source fingerprint |
What this value means
THERE IS NO SINGLE WITHHOLDING TAX RATE, WHICH IS WHY value IS NULL. Iceland's rates differ by payment type AND by recipient class (individuals at the 22% capital-income rate, companies at the 20% corporate rate; interest at its own 12% rate for non-residents). A caller wanting a number must name the payment type and recipient class; read withholding_rates rather than expecting a headline figure. ALL RATES ARE DOMESTIC STATUTORY RATES, BEFORE TREATY RELIEF. Iceland's treaties reduce dividend, interest and royalty rates (interest commonly to 0-10%), but relief is not automatic: 'Exemption from taxation or reduced tax rate in Iceland according to agreements in force can only been achieved by filing an application for exemption/reduction on form RSK 5.42... Until the application has been approved and confirmed one has to pay taxes in Iceland, based on national legislation.' Iceland is in the EEA but NOT the EU, so the Parent-Subsidiary and Interest-Royalties Directives do not apply; instead, EEA-resident limited-liability companies can reclaim in full the tax withheld on dividends received from Icelandic companies (refund, not exemption at source). We do NOT serve treaty rates: they are bilateral and applying one is a legal determination rather than a lookup. The series effective_from is 1 January 2025: 2024 carried temporary one-year surcharges (dividends to companies 21%, interest 13%) that reverted to 20% and 12% from 2025. Where the pages state '2024' exceptions, the current rates shown here are the post-2024 ones. VALUE UNDER CHALLENGE (11 August 2026) - royalties-corporate. The 20% served for royalties paid to non-resident COMPANIES does not match the consolidated Income Tax Act. Lög nr. 90/2003, 70. gr. 6. tölul. fixes tax on Article 3.6 income (lease, usufruct or utilisation rights over movables, patents, rights of every kind, specialised knowledge, and gains on such property) at a flat 22% of income for all parties - there is no separate company rate - the 22% having replaced 20% by Lög nr. 96/2017, 5. gr. from the 2018 income year. The 20% figure survives only on Skatturinn's English 'Limited tax liability' summary page and on PwC. Statutory text: https://www.althingi.is/lagas/nuna/2003090.html (70. gr., 6. tölul.). This needs a value decision, not a citation decision; the series confidence has been dropped to secondary until it is made.
Get it programmatically
curl https://euroref.dev/v1/is/withholding-tax
# $0.005 per call — x402 on Base (USDC). No key, no signup.
# History: curl https://euroref.dev/v1/is/withholding-tax/history?from=2020-01-01
# Provenance: curl https://euroref.dev/provenance/is/withholding-taxOther Iceland series: Central Bank of Iceland key interest rate · Statutory default interest (dráttarvextir) · Virðisaukaskattur (VSK / VAT) standard rate · VAT registration threshold · General statutory minimum wage (none — structural null) · Public holidays (frídagar og helgidagar) · CPI inflation (vísitala neysluverðs, twelve-month change) · Tekjuskattur lögaðila · Tekjuskattur og útsvar einstaklinga · Statutory social-insurance contributions · Central Bank of Iceland reference exchange rates
The same figure elsewhere: Ireland · Italy · Latvia · Lithuania · Luxembourg · all 34