Debt of Icelandic Companies Shoots Up Over 10 Years Skip to content

Debt of Icelandic Companies Shoots Up Over 10 Years

The amount of debt accumulated by Icelandic businesses is 45 times higher today than one decade ago, according to tax assessment notices from 2008.

Accumulated debt has shot up from ISK 350 billion (USD 3.0 billion, EUR 2.3 billion) in 1998 to ISK 16,000 billion (USD 138 billion, EUR 105 billion) last year, as described in an article by economist Páll Kolbeins published in the March issue of Tíund, the Commissioner of the Inland Revenue newsletter.

Photo by Geir Ólafsson.

The debt accumulated by individuals follows the same pattern and has grown by 130 percent in the past five years, RÚV reports.

In 2008, 2,000 people carried individual debt in excess of ISK 50 million (USD 430,000, EUR 328,000).

Out of that group, 44 individuals owed more than ISK 400 million (USD 3.4 million, EUR 2.6 million) and 18 more than ISK 1 billion (USD 8.6 million, EUR 6.6 million).

In comparison, only 120 people carried individual debt greater than ISK 50 million in 2003.

Commissioner of the Inland Revenue Administration Skúli Eggert Thórdarson and Deputy Commissioner Ingvar J. Rögnvaldsson expressed their deep concern over this development in their editorial in Tíund.

They wrote that the general public, who had no responsibility for the collapse of the banking system, will now have to pay higher taxes, “because of this fateful handling of assets that seems to have taken place among a few dozen individuals, most of whom were hidden behind provisions for banking confidentiality and tax shelters.”

Click here to read more about tax shelters and here to read about former chairman of Kaupthing Bank defending banking confidentiality.

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