Reimbursement of income tax

Applications for a refund of withholding tax may be made if the applicant has paid higher tax than the expected tax assessment result at the end of the year.

Reimbursement may only be made in special cases if a withholding tax is at least 20% higher than the expected tax assessment result for the income year.

The cases that may be considered are due to:

• Studies

• Revenue loss

• Sickness or accident

• Spouse's death

Repayment for joint taxation and transfers between tax levels

In addition, a refund may be applied for if the applicant's income is taxed at the highest tax level, but the income of the spouse with whom the applicant is jointly taxed does not reach the highest tax level.

The withholding that has been paid at source and deducted from wages over the year is then recalculated with respect to the transfer between tax levels of the jointly taxed. Such reimbursement may never amount to less than ISK 50,000 or more than ISK 300,000.

Application

Applications for a refund on the form RSK 5.09. The application must include supporting arguments and supporting documentation.

When an application is accepted, the amount of the refund is deposited in the registered bank account. Bank details may be registered on the Tax Service website.

Period

Applications shall be received from 1 October to 1 March each year.