Tax Havens Prove to Be Taxing Subject for New PM Skip to content

Tax Havens Prove to Be Taxing Subject for New PM

By Iceland Review

The first job of PM Sigurður Ingi Jóhannsson on Friday was to have it looked into whether it’s possible to make it illegal for Icelanders to keep their money in tax havens, according to

Sigurður took over as prime minister Wednesday after his predecessor, Sigmundur Davíð Gunnlaugsson, was forced to resign in the wake of the Panama Papers scandal, which revealed Sigmundur’s connection to a company on Tortola. The Panama papers contain information about 600 Icelanders connected to 800 companies in tax havens.

Sigurður Ingi told Morgunblaðið, “The documents gave us insight into a strange world: that wealthy individuals keep their money in tax havens, even though they pay taxes on them. Clearly, it’s legal. Therefore, this is first and foremost an ethical issue.” When Sigurður inquired about the possibility of making it illegal for Icelanders to store their money in tax havens, “The first responses from experts tell us that because of, among other things, the Equality Directive of the European Union, that’s impossible.”

He added, “This is an international problem,” and storing your money in a tax haven, “is not illegal, but it is abnormal.”

Sigurður had previously been strongly criticized for his remark on March 30, when asked by Stöð 2 whether he found it normal for then PM Sigmundur Davíð Gunnlaugsson to keep large amounts of money on Tortola. His response: “It’s obviously quite complicated to have money in Iceland,” and he added, “Money needs to be somewhere.”

Last week in Alþingi, the Icelandic parliament, Sigurður expressed the opinion that there was “nothing wrong with keeping your money that way [in a tax haven], as long as as it’s done a way that people pay taxes and duties here … money that‘s legally obtained.” It is, however, wrong, he said, to use tax havens to hide money and to avoid taxes to the community. Then he encouraged all Icelanders with their money in tax havens to bring heir money home to Iceland and clean up their act.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!