Do you live in Iceland and receive pension from another Nordic country?
This applies to people resident in Iceland who receive a pension from another Nordic country. This information only applies to tax on the foreign pension.
Taxation in the country of origin
You should pay taxes in the country the payments comes from according to that countries domestic tax law.
Taxation in Iceland
You must declare the whole pension from the other Nordic country in your Icelandic tax return, in chapter 2.8, foreign income. This also applies if you have paid tax on your pension in the country from which it is paid. The total income, both domestic and income from abroad, will be taxed in Iceland, but the tax is then lowered with the same percent the income from abroad is in your total income.
For exempel if your income from abroad is 60% of the total income, the tax is lowered by 60%.