Iceland: Proposal to amend the Withholding Tax Act No. 45/1987 approved by parliament
Further to Taxflash T19025 concerning the Icelandic government’s proposal to amend the Withholding Tax Act No. 45/1987, Clearstream Banking1 would like to inform customers that the proposal was approved by the Icelandic parliament on 6 May 2020, effective
immediately
The adopted changes, which were enabled as a result of our ongoing collaboration with the Icelandic authorities, have resulted in the following:
- Capital gains derived from transactions on equities are no longer subject to withholding tax for non-residents (neither for residents);
- Interest income received by non-residents from Icelandic debt securities listed with a Central Securities Depository in an OECD or EU/EEA member state is no longer subject to withholding tax;
- The withholding tax obligation on dividends shifts from the issuer to a domestic financial institution, if shares are electronically registered and in the custody of the respective domestic financial institution.
The operational guidelines are still to be clarified with the Icelandic authorities, but we trust that the adopted changes will provide us with the necessary framework to restore the activity for Icelandic equities and taxable debt securities. Please note that the taxable debt securities are those not listed in the RSK tax exempt list.
Further information
We continue to monitor the Icelandic market for new developments and will provide detailed information as it becomes available.
For further information, customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Customer Service or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany, and registered in Register B of the Amtsgericht Frankfurt am Main, Germany, under number HRB 7500.