Icelanders who own holding companies in tax shelters in places such as Tortola must inform Icelandic tax authorities of all trade undertaken in relation to these companies, according to a new government bill.
The same goes for auditors or representatives of investment companies who have established such companies for their customers. These individuals must keep a register of their clients, which taxation authorities can call for, Morgunbladid reports.
Inside Iceland’s Althingi parliament. Copyright: Icelandic Photo Agency.
The planned law amendments to income tax and public tariffs, which is being worked on by the Social Democrats, the Left-Greens and the Progressive Party in parliament, will obligate all companies that pay taxes in Iceland to provide information on their trade with subsidiaries and foreign branches.
Furthermore, those who work on international tax consultancy in Iceland must keep a register of clients that have direct or indirect access to a company, fund or institution that is registered abroad.
All other privacy, privilege and confidentiality provisions will be subordinate to this obligation, according to the new bill. The purpose is to prevent individuals from eluding tax payments in their home country by hiding their assets abroad.
According to Morgunbladid, Icelandic companies have established hundreds of holding companies in well-known tax shelters in recent years.
A total of 136 companies registered in Tortola were granted an Icelandic ID number from 2000 to 2008 to undertake banking operations in Iceland.
Most of these companies were under the supervision of the three banks that have now been nationalized, Landsbanki, Glitnir (currently known as Íslandsbanki) and Kaupthing.
Click here to read more about Icelandic companies in Tortola.