Iceland tax rates
The top rates a resident individual pays on each kind of income, computed by the Sovereign tax engine from its Iceland tax profile.
Tier 1 — every figure rests on a statute or a tax authority page. Sources last checked 7 November 2026. Figures last changed 7 November 2026. Profile last reviewed 30 April 2026.
Scroll across the table to see all tax rates.
| Where | Salary | Capital gains | Dividends | Interest | Rent | Crypto gains |
|---|---|---|---|---|---|---|
| General rule | 48.44% | 22% | 22% | 22% | 16.5% | 22% |
| Reykjavík | 48.47% | 22% | 22% | 22% | 16.5% | 22% |
| Garðabær | 48.22% | 22% | 22% | 22% | 16.5% | 22% |
| Generic upper-cap commune | 48.47% | 22% | 22% | 22% | 16.5% | 22% |
Each figure is the tax on one more unit of a very large amount of that income, with every layer the engine models: surtaxes and uncapped social contributions included. It is the top marginal rate, not the average rate you pay on all your income. The regions in the table have their own rates; other regions are not in our model.
What is the top income tax rate in Iceland?
The top rate on a salary is 48.44% under the general rule; some regions differ. It is the tax on each extra unit of a very high salary, with surtaxes and uncapped social contributions included. The income tax scale alone reaches 46.29% above ISK 16,781,397.
How are capital gains taxed in Iceland?
The top rate on a long-term capital gain is 22% under the general rule; some regions differ. The rate does not depend on how long you held the asset.
How are dividends and interest taxed in Iceland?
The top rate is 22% on dividends and 22% on interest under the general rule; some regions differ. Rental income is taxed at up to 16.5%.
How is crypto taxed in Iceland?
Iceland taxes a gain on crypto assets as a capital gain, at up to 22%.
Does Iceland tax foreign income?
Yes. Iceland taxes its residents on their worldwide income. A tax treaty or a credit for foreign tax can reduce the tax on income from abroad.
Does Iceland have a wealth tax?
No. Iceland has no recurring national tax on net wealth in our model. Property taxes and taxes on gifts or inheritances are separate.
Does Iceland have an exit tax for individuals?
No. In our model Iceland does not tax an individual's unrealised gains when the individual moves abroad.
What special tax regimes does Iceland have?
Our profiles list one regime: Foreign Expert Tax Regime (Sérfræðingaafsláttur / Skattaafsláttur erlendra sérfræðinga) (up to 3 years). It has its own conditions.
When do you become tax resident in Iceland?
The Iceland day test (more than 183 days in any 12 months): more than 183 days in a rolling 12 months; normal absences count. The Tax Administration's English summary calls this 'six months or longer'; its Icelandic legal explanation says 'more than 183 days'. The calculator uses the latter threshold.
Residence decides whether Iceland taxes you on these rates. See the Iceland day-count test and count your own days.
Sources
The Iceland profile cites 8 sources for these rules, 8 of them from a government or a statute.
- Skatturinn employer notice 1/2025: rates, annual credit and pension deductions · official, retrieved 2026-11-03
- Skatturinn employer notice 1/2026: rates, annual credit and pension deductions · official, retrieved 2026-11-07
- is shared capital allowance 20261107 · official, retrieved 2026-11-07
- Skatturinn - Fjármagnstekjur og fjármagnstekjuskattur 2025 · official, retrieved 2026-04-30
- Lög nr. 96/2017 - Hækkun fjármagnstekjuskatts úr 20% í 22% · official, retrieved 2026-04-30
- Residential rental taxation:75% taxable from 2026 · official, retrieved 2026-11-03
- is residential holding 20261107 · official, retrieved 2026-11-07
- Skatturinn - Útvarpsgjald og sóknargjald 2025 · official, retrieved 2026-04-30
The model covers the general rules for a resident individual. It does not cover every deduction, credit, tax treaty or local tax, and rules change after the check date above. Did you find an error? Tell us, with the source.
Compare Iceland with other countries
Top rates do not show what you would pay. Sovereign applies these rules to your own assets, income and debts, and compares the result across 165 countries. Put Iceland side by side with other countries, see every country or try the live demo.
Other countries in Western Europe: Italy, Jersey, Liechtenstein, Luxembourg, Monaco, Malta.