Annual List of Highest Tax Payers in Iceland Published

Finances in Iceland

The financial journal Frjáls Verslun has recently published their annual list of Iceland’s highest tax payers, compiled from public information available in the tax registry.

Number one on the list this year is Björn Erlingur Jónasson, former owner of Valafell ehf., a shipping company which he owned together with his wife, Kristína Vigfúsdóttir. The vast majority of the taxes paid, ISK 689 million of a total of 692 million, were from the sale of Valafell to KG Fiskverkun.

Another noteworthy member of Iceland’s “tax kings” is Haraldur Þorleifsson, former owner of tech company Ueno, which he sold to Twitter in 2021. Haraldur paid some ISK 592 million in tax for the sale, making him the highest tax payer in Reykjavík. However, this honorary status was taken on by choice, as Haraldur negotiated during the sale to pay tax in Iceland, and for the majority of the sale to paid in wages.

This choice placed the realized profit in a much higher tax bracket, as wages are taxed at 46% in Iceland, whereas capital gains income is taxed at a much lower rate of 22%. Haraldur has been an activist for increased accessibility for the disabled in public spaces, and he has stated in an interview with Stundin that he was happy to give back to the society which provided him with his education.

Despite being the highest tax-payer, however, Haraldur is far from the highest earner in Iceland. Stundin has criticized the list as giving an incomplete picture of wealth and inequality in Iceland. According to Stundin, in placing the emphasis on wage, the annual list hides income from capital gains, and thereby obscures the true centers of wealth in Iceland.

For example, the annual list places many of the CEO’s of Iceland’s shipping companies relatively low, as they take relatively modest monthly wages home. However, their total financial assets often represent figures in the hundreds of millions of ISK. As these sources of income are taxed at a much lower rate, the list could be said to present an incomplete view of income in Iceland.

Similarly, the tax report only includes individual income. Many of Iceland’s top earners, including artists, lawyers, and businessmen, make significant portions of their income through partnerships, cooperatives, and other organizations that are registered as separate tax entities.

The annual list also discloses a gender imbalance within the nation’s top earners. The first woman on the list, Kristín Guðríður Jóhannsdóttir, is to be found in 21st place. Within the top 50 earners in Iceland, only five women are represented.

Icelandic Artist Royalties No Longer Subject to Income Tax

Masterkey Studios

Revenue from copyrighted material will now be taxed as capital gains in Iceland, and therefore not subject to income tax, RÚV reports. Performing rights organisations are welcoming this change, passed by the Icelandic parliament yesterday.

Musicians are one example of copyright holders who get paid royalties for the use of their compositions. The new amendment means they will no longer have to pay income taxes on this revenue. The legislation will also affect other types of creators, such as writer and visual artists. Icelandic Music Association Chairman Jakob Frímann Magnússon welcomed the change in a Facebook post, calling the legislation unique and its implementation the result of a 25-year battle.