Tax Liability on Income Between Countries
Full and Unlimited Tax Liability in Iceland
Individuals who are permanently resident in Iceland are subject to full and unlimited tax liability in Iceland.
Full and unlimited tax liability means, among other things, that individuals who are permanently resident in Iceland must report all income received from abroad on their Icelandic tax return. The same applies to assets held abroad.
The most common cases where full and unlimited tax liability applies to income between countries are:
Individuals who are permanently resident in Iceland.
Individuals who stay in Iceland for more than 183 days in total during any 12-month period. Normal absences from Iceland for holidays and similar reasons are included in the period of stay. The same rule applies to individuals working on board an aircraft or vessel registered in Iceland.
Individuals who have moved abroad and ceased to be legally domiciled in Iceland but have not provided the required documentation showing that they are subject to tax in another country.
Individuals studying abroad may apply to retain their tax residence in Iceland and thereby retain the rights associated with it. Read more about the tax liability of students studying abroad.
Iceland Revenue and Customs determines who is considered resident in Iceland for tax purposes, based on the rules of the Act on Legal Domicile, as applicable. Decisions by Iceland Revenue and Customs may be appealed to the Internal Revenue Board.
Service provider
Skatturinn - Iceland Revenue and Customs