A branch is treated as an extension of a trading activity of the overseas parent company incorporated in another jurisdiction and is not a separate legal entity.
Due to the fact that a branch acts in the name of the overseas parent company, a branch's income is taxable in accordance with the parent company (i.e. if the parent company is an LLC, the branch is subject to a CIT rate of 20%; otherwise, it is subject to tax at 37.6%).
Tax treaties may allow Icelandic CIT as a credit against foreign income tax imposed on the parent company.
There is no branch profits remittance tax on the repatriation of profits to the parent company.