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Tax system in Iceland to be simplified

Prime Minister Geir H. Haarde would like to abolish taxes that companies have to pay of their stock profits, he announced in a speech at a trade convention in Hotel Nordica in Reykjavík yesterday.

“I believe it is natural that we change our law provision and abolish this kind of taxation […]. This would not lead to a loss in profits in the state treasury. On the contrary, it is likely that [companies] would move [their] operations back to the country,” Haarde said. Fréttabladid reports.

Some companies have moved their operations away from Iceland and to countries like the Netherlands to escape taxation on stock profits.

Haarde said he wanted the tax system in Iceland to be able to compete with other countries. He would like it to be simple, but effective, so that the state treasury would also profit from it.

Haarde added that the positive experience of changes of the tax system in Iceland in the last few years had confirmed his belief that Iceland should take further steps in that direction.

“If we manage to attract foreign investments we’ll strengthen the state management and secure a powerful social system,” the prime minister concluded.

“We should aim at having a ten percent taxation on everything,” said Baugur Group CEO Jón Ásgeir Jóhannesson at a discussion round after the prime minister’s speech.

Lýdur Gudmundsson, the CEO of Exista, Svafa Grönfeldt, the rector of the University of Reykjavík and Róbert Wessman, the CEO of Actavis, also took part in the discussion. About 500 guests attended the trade convention.

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