Corporate taxation in Iceland and the international challenge

• Published in: Nordic Tax Journal
• Main Authors: Agnarsdóttir, Fjóla, Jensdóttir, Rakel
• Format: Article in Journal/Newspaper
• Language: English
• Published: Walter de Gruyter GmbH 2014
• Subjects: Iceland
• Online Access: http://dx.doi.org/10.1515/ntaxj-2014-0023; http://content.sciendo.com/view/journals/ntaxj/2014/2/article-p149.xml; https://www.sciendo.com/pdf/10.1515/ntaxj-2014-0023

Abstract This article aims to describe the development in the field of corporate tax law in Iceland, from both legal and economic point of view, with a focus on measures taken to protect the tax base and in order to try to make Iceland an attractive place for investment and establishment companies. First, there will be a brief general description of the development of the corporate tax rate in Iceland since 2004 and an overview of new taxes that have been introduced for companies over the past ten years. Second, there will be an analysis of how the Icelandic legal framework provides for incentives for investment and establishment of companies in Iceland. Third, this discussion is to be followed by a section on the steps Iceland has taken in order to combat tax avoidance. Fourth, there is a general description of the economic development for the corporate taxation in Iceland since 1990 and fifth, there is brief discussion of the development of revenues from the corporate tax. Sixth, a short overview of the real investment in the Icelandic economy is given, and finally, the main conclusions of this article will be summed up with a short discussion on the main challenges Iceland is currently facing in the field of corporate taxation in today’s globalised economy.