Do you live in another Nordic country and have interest income/interest expenses in Iceland?

This applies to persons resident in another Nordic country who receive interest income from Iceland, or pay interest to a creditor in Iceland.

Interest income 
If you are resident in another Nordic country, interest income from an Icelandic source is liable to tax in your homecontry not in Iceland.
In order to avoid taxation in Iceland, you must apply for exemption from taxation of interest income , based on the double taxation treaty between the countries. You do this on the form RSK 5.42

In this context, interest income means income from financial assets, for example interest on bank accounts and bond unit trusts.

If you have not applied for exemptions and therefore been taxed in Iceland, you can request a refund of the tax at Ríkisskattstjóri. You do this on the form RSK 5.43

Interest expenses
If you have limited tax liability in Iceland for real property or for income from employment only, you are not entitled to interest deductions or interest credits in Iceland.


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