Iceland · Tax regime
Tax Discount for Foreign Experts
Open
Last verified July 2026
Open. 25% of income is excluded from the taxable base for the first 3 years — i.e. only 75% is taxed. Applications go through Rannís, the Icelandic Centre for Research.
Three years at 75% of the taxable base is modest by Nordic standards — Denmark gives seven years at 32.84% and Finland seven at 25% — but Iceland has no wealth tax and only 22% capital gains, so the overall capital position is cleaner than the headline rate suggests.
Qualifying routes
—
Approved foreign expert
25% deduction from taxable income for 3 years; no salary threshold
The facts
- Total landed cost
- No fee. Worth roughly 11.5 percentage points off a 46.29% marginal rate for three years.
- Timeline
- 1–3 months — apply via Rannís within 3 months of starting work — a hard deadline
- Physical presence
- Icelandic tax residence and employment
- Family
- individual to the employee
- Permanent residency
- Separate track
- Citizenship
- 7 years
- Language test
- Icelandic language test at roughly A2 level
- Dual citizenship
- Permitted
- Requirements
- not resident or domiciled in Iceland during the 60 months priorexpertise unavailable or scarce in Icelandwork in R&D, innovation, teaching, specialised projects, project or construction management, or other key rolesapplication via Rannís within 3 months of starting work
What can go wrong
- You must apply via Rannís within 3 months of starting work. Miss it and the relief is gone.
- Only 3 years — much shorter than Denmark's 84 months or Finland's 84 months.
- You must not have been resident or domiciled in Iceland during the 60 months prior (the first 3 months of the stay are not counted).
- Wage-related charges, child benefits and interest relief are still computed on TOTAL gross salary, not the reduced base — so the relief is narrower than 25% in cash terms.
- The expertise must genuinely be unavailable or scarce in Iceland, in R&D/innovation, teaching, specialised projects, project/construction management or other key roles.