Iceland

Corporate - Significant developments

Last reviewed - 09 July 2020

Thin capitalisation rules

An amendment has been made to the Icelandic Income Tax Act no. 90/2003. The rules, which are applicable from the income year 2019, state that interest deduction limitation rules do not apply when the whole company group bears full and unlimited tax liability in Iceland and the companies meet the requirements for joint taxation in Iceland.

Value-added tax (VAT) reverse-charge rules

On 1 January 2019, a new article was amended to the VAT Act no. 50/1988. The article covers reverse-charge rules and rules regarding VAT on exports.