Personal Exemption to Increase in Iceland Skip to content

Personal Exemption to Increase in Iceland

Personal exemption will increase considerably in Iceland as of January 1, 2009, by 24 percent or roughly ISK 8,000 (USD 66, EUR 46) per month, according to information from the Ministry of Finance. Personal exemption will increase to almost ISK 42,000 (USD 346, EUR 244).

It is unclear how high the income tax will be next year, although Iceland’s Althingi parliament has already accepted a 1.25 percent increase in taxes, permitting municipalities to increase their maximum local tax by 0.25 percent, visir.is reports.

Reykjavík is among the municipalities that have decided not to increase local tax and therefore the income tax of Reykjavík tax payers may be somewhat lower than expected.

The income tax in Iceland is currently 35.72 percent and is expected to increase to roughly 37.1 percent in 2009. However, since the personal exemption will be considerably higher than in 2009, a number of tax payers may pay a lower amount to taxes than last year.

Copyright of picture of Minister of Finance Árni M. Mathiesen: Icelandic Photo Agency.

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