Income Tax in Iceland Remains Unchanged This Year Skip to content

Income Tax in Iceland Remains Unchanged This Year

A bill on amendments to income tax laws has not been devised, and the government will submit no such bill in the coming summer parliamentary session. Taxation issues are not included in the 100-day action plan of the new government either.

Photo by Páll Stefánsson.

However, the declaration of cooperation created by the Social Democrats and the Left-Greens does include a clause on immediate action in state finances. It refers to reducing state expenses and increasing revenue, Fréttabladid reports.

According to Fréttabladid’s sources, if taxation laws were amended, it would not happen until next year. The coalition parties have purportedly not agreed on ways to increase state revenue through the taxation system.

Allegedly, the parliamentary group of the Left-Greens wants taxation reforms to be undertaken as soon as possible, introducing a supertax on top earners and increasing capital gains tax from ten to 14 percent, but the Social Democrats do not support these changes.

The coalition parties seem to have different views on taxation matters and tax increases weren’t discussed thoroughly during the government talks that ended on Sunday. More emphasis was placed on cuts rather than tax increases.

However, it is considered likely that consumption taxes will be introduced next summer, so-called “green taxes” that might be added to the price of fuel, alcohol and tobacco.

Click here to read more about the government agreement and 100-day action plan.

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