On 30 October 2026, Iceland Revenue and Customs (Skatturinn) officially announced the completion of the 2026 corporate tax assessment cycle, finalizing tax liabilities for all legal entities operating in Iceland for the 2025 income year. This assessment is conducted under the authority of Act No. 90/2003 on Income Tax, as amended by Act No. 117/2023, which introduced modifications to corporate tax rates, deduction limitations for interest expenses, and enhanced reporting requirements for multinational enterprises. The assessment process integrates data from the Register of Enterprises (RSK), annual financial statements submitted under the Annual Accounts Act No. 3/2006, and pre-filled tax returns generated through Skatturinn’s digital platform. The final assessment determines the definitive corporate income tax base, applying the standard 20% tax rate, while incorporating specific incentives such as the R&D tax credit (up to 20% of qualifying expenditure) and the accelerated depreciation scheme for green energy investments. Taxpayers are required to review the assessment notices delivered electronically via the Ísland.is digital mailbox and settle any outstanding tax liabilities by the statutory payment deadline of 1 December 2026. Failure to pay on time triggers penalty interest at the statutory rate of 5.5% per annum, compounded daily, and may result in enforcement actions including tax liens on corporate assets. The Directorate of Internal Revenue emphasized that the assessment reflects the full implementation of the EU Anti-Tax Avoidance Directive (ATAD) provisions as incorporated into Icelandic law via the EEA Agreement, including controlled foreign company (CFC) rules, hybrid mismatch rules, and the interest limitation rule. Multinational groups with consolidated revenues exceeding EUR 750 million must also consider the implications of the OECD Pillar Two global minimum tax framework, which Iceland has committed to implementing through domestic legislation expected to take effect for fiscal years starting on or after 31 December 2026.
Key Takeaways
- Finalized Tax Liabilities and Rate Application: The 2026 assessment locks in corporate tax obligations for the 2025 fiscal year, applying the standard 20% corporate tax rate with specific deductions for R&D expenditures (up to 20% credit) and accelerated depreciation for qualifying green energy assets. The assessment also reflects the new interest limitation rule under Article 10a of the Income Tax Act, which caps net interest deductions at 30% of EBITDA for multinational groups, aligning with OECD BEPS Action 4 and EU ATAD Directive.
- Digital Delivery and Appeal Window: Assessment notices are issued exclusively electronically via the Ísland.is digital mailbox; companies must ensure authorized access to review and respond within the 30-day appeal window. Taxpayers who identify discrepancies may file an administrative appeal with the Tax Appeals Committee (Skattankefni) by 29 November 2026, providing supporting documentation such as revised financial statements or transfer pricing documentation. The appeal suspends enforcement of the contested amount pending a decision.
- Payment Schedule and Compliance Obligations: Any additional tax due must be paid by 1 December 2026, with interest accruing on late payments at the statutory rate of 5.5% per annum. Companies with tax liabilities exceeding ISK 1 million are required to make provisional payments for the 2026 income year based on the assessed 2025 results, with the first installment due 1 February 2027. Multinational enterprises must also ensure country-by-country reporting (CbCR) notifications are updated in the RSK registry to avoid automatic adjustments.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement