Who has to submit a tax return?
Those with unlimited tax liability in Iceland must, without exception, submit a tax return. Those with limited tax liability must also submit a tax return if they have been receiving wages, pensions or rental income of real estate in Iceland, even though they are residing abroad and with unlimited tax liability in their home country. For further details see the information under Limited tax liability and Pensions.
Where can a tax return be obtained?
Tax returns are pre-registered and is to be found at the website skattur.is. You can only deliver tax returns in Icelandic electronically. To be able to submit electronically, you must have your own privat password that you can apply for by logging into the website skattur.is If you are living in Iceland can also use digital certificates that you can apply for at Auðkenni or banks.
For foreign nationals, staying in Iceland for a short time, a paper tax returns in English 1.10 or 1.13 (simplified version), is available on the website rsk.is, but they can not be submitted electronically.
When shall tax return be submitted?
A tax return shall be submitted to the Directorate of Internal Revenue during the advertised submission period, usually in March. Those coming to Iceland for a short stay must submit a tax return to the Directorate of Internal Revenue at least one week before departure. Your dwelling time in Iceland and your address abroad must appear on the tax return along with the name and adress of your agent in Iceland, if you have one. Taxes are assessed in June the year after the income year. If a tax return is not submitted, your income is estimated and taxes are assessed on the basis of this estimated amount.
Where should tax returns be submitted?
The tax return is submitted electronically on the service page skattur.is. Those foreign nationals that have a paper tax returns in English, shall submit them at the nearest office of Ríkisskattstjóri.
Exchange of information between the tax authorities
In order to ensure the correct taxation, all the Nordic countries have rules requiring employers, banks and others to submit information to the tax authorities about any wages, pensions, dividends, interest etc. that they have paid. This information includes the name and address of the recipient and the type and amount of income concerned. The obligation to provide information also applies to payments made to persons living in other countries.
In order to ensure the correct taxation the tax authorities in the Nordic countries have agreed to exchange tax information. The exchange takes place every year between appointed units within the tax authorities and the information is transmitted through secured channels. Large quntities of data are exchenged between the Nordic countries. This information is used by the tax authorities in the residence country to control that persons with cross-border activities have fulfilled their obligations to report their income and assets from abroad.