OpenAccountants/Iceland/Iceland Corporate Income Tax

Iceland Corporate Income Tax

Name: OpenAccountants MCP Server
Author: OpenAccountants

Source-cited draft: corporate income tax for Iceland (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review.

Applicable period 2025Source-cited draft· Last updated Jun 25, 2026

Source-cited draft.Written from sources but not reviewed by a licensed practitioner, so it may be incomplete or wrong. General reference only; don't file or take a position on it without professional review.

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Key figures — Iceland, 2025

Every figure is drawn from this Tax Guide and cited to its source.

Corporate income tax rate — limited liability companies (hf./ehf.)

20%Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income)

Income tax rate — partnerships and other legal entities (incl. general partnerships taxed as separate entities)

37.6%Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income)

Tax base

Worldwide income less deductible operating expenses (all costs needed to earn, secure and maintain income)Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income)

Non-resident companies

Taxed at the same rates as resident companies on Iceland-source income / permanent establishment profitsAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income)

Inter-company dividends

Dividends received by a resident company are effectively exempt — a deduction equal to received dividends generally eliminates taxAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/income-determination)

Tax loss carryforward

Losses may be carried forward for up to 10 years; no carrybackAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/deductions)

Withholding tax on dividends to non-residents

20%Act No. 90/2003 on Income Tax; Act No. 94/1996 on Withholding of Tax on Financial Income (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes)

Withholding tax on interest to non-residents

12%Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes)

Withholding tax on royalties to non-residents

20%Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes)

Corporate tax year

Calendar year; other fiscal years require approval of the Internal Revenue DirectorateAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration)

Corporate tax return deadline

Generally 31 May following the tax year; extension to 30 September for professionally prepared returnsAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration)

Advance corporate tax payments

Monthly advance payments of 8.5% of the prior year's assessed income tax, due on the 1st of each month from February to SeptemberAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration)

Final corporate tax balance

Any balance after final assessment (available end of October) payable in equal installments by 1 November and 1 DecemberAct No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration)

Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.

The full Guide

Corporate income tax rates and base (2025)

Corporate income tax rate — limited liability companies (hf./ehf.) — 20% percent (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))
Income tax rate — partnerships and other legal entities (incl. general partnerships taxed as separate entities) — 37.6% percent (approx — some sources cite 38.4%; confirm entity classification) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))
Tax base — Worldwide income less deductible operating expenses (all costs needed to earn, secure and maintain income) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))
Non-resident companies — Taxed at the same rates as resident companies on Iceland-source income / permanent establishment profits (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))
Inter-company dividends — Dividends received by a resident company are effectively exempt — a deduction equal to received dividends generally eliminates tax (approx — confirm conditions) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/income-determination))
Tax loss carryforward — Losses may be carried forward for up to 10 years; no carryback (approx — confirm 10-year period) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/deductions))
Withholding tax on dividends to non-residents — 20% percent (corporate recipients may reclaim down to 20% effective rate / refunds available; reduced under treaties) (Act No. 90/2003 on Income Tax; Act No. 94/1996 on Withholding of Tax on Financial Income (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))
Withholding tax on interest to non-residents — 12% percent (corporations; standard 12%, commonly cited at 12-13%; approx — confirm; PwC cites 13% gross, statutory 12%) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))
Withholding tax on royalties to non-residents — 20% percent (standard CIT rate applied gross; reduced under treaties) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))
Corporate tax year — Calendar year; other fiscal years require approval of the Internal Revenue Directorate (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))
Corporate tax return deadline — Generally 31 May following the tax year; extension to 30 September for professionally prepared returns (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))
Advance corporate tax payments — Monthly advance payments of 8.5% of the prior year's assessed income tax, due on the 1st of each month from February to September percent (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))
Final corporate tax balance — Any balance after final assessment (available end of October) payable in equal installments by 1 November and 1 December (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))

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Corporate income tax rates and base (2025)

Corporate income tax rate — limited liability companies (hf./ehf.) — 20% percent (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))

Income tax rate — partnerships and other legal entities (incl. general partnerships taxed as separate entities) — 37.6% percent (approx — some sources cite 38.4%; confirm entity classification) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))

Tax base — Worldwide income less deductible operating expenses (all costs needed to earn, secure and maintain income) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))

Non-resident companies — Taxed at the same rates as resident companies on Iceland-source income / permanent establishment profits (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/taxes-on-corporate-income))

Inter-company dividends — Dividends received by a resident company are effectively exempt — a deduction equal to received dividends generally eliminates tax (approx — confirm conditions) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/income-determination))

Tax loss carryforward — Losses may be carried forward for up to 10 years; no carryback (approx — confirm 10-year period) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/deductions))

Withholding tax on dividends to non-residents — 20% percent (corporate recipients may reclaim down to 20% effective rate / refunds available; reduced under treaties) (Act No. 90/2003 on Income Tax; Act No. 94/1996 on Withholding of Tax on Financial Income (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))

Withholding tax on interest to non-residents — 12% percent (corporations; standard 12%, commonly cited at 12-13%; approx — confirm; PwC cites 13% gross, statutory 12%) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))

Withholding tax on royalties to non-residents — 20% percent (standard CIT rate applied gross; reduced under treaties) (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/withholding-taxes))

Corporate tax year — Calendar year; other fiscal years require approval of the Internal Revenue Directorate (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))

Corporate tax return deadline — Generally 31 May following the tax year; extension to 30 September for professionally prepared returns (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))

Advance corporate tax payments — Monthly advance payments of 8.5% of the prior year's assessed income tax, due on the 1st of each month from February to September percent (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))

Final corporate tax balance — Any balance after final assessment (available end of October) payable in equal installments by 1 November and 1 December (Act No. 90/2003 on Income Tax (https://taxsummaries.pwc.com/iceland/corporate/tax-administration))