Market Taxation Guide - Iceland

05.02.2021

This Market Taxation Guide (Iceland) provides the following details:

  • Reference information about all taxes applied at source, through Clearstream Banking and its local depositories, to securities deposited in Clearstream Banking; and
  • Instructions for obtaining relief at source or a refund of withholding tax, where these are available, through Clearstream Banking.

New and improved tax information and procedures that become available will be included on an ongoing basis.

Important note:

This Market Taxation Guide (including any attachments and other links) is for informational purposes only and is not intended and should not be considered to be legal advice on any subject matter. Readers of this Market Taxation Guide, whether customers or otherwise, should not act or refrain from acting on the basis of any information included in this Market Taxation Guide without seeking appropriate legal or other professional advice.

Withholding tax

Debt securities exempt from non-resident taxation on interest a

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

0%

Non-residents of Iceland

N/A

N/A

N/A

Icelandic banks complying with Article 3.2 of Act no. 94/1996

N/Ab

N/A

N/A

a. Exempt debt securities (exemption from non-resident taxation) are those falling under scope of Article 1 of Act. no. 39/ 2013, Article 1 of Act no. 53/2014 and Article 1 of Act no. 107/2015.
b. Customers that are Icelandic Banks complying with Article 3.2 of Act no. 94/1996 will by default receive income payments with 0% non-resident withholding tax. Certification is therefore requested from such customers for reporting purposes to ensure such entities are reported as Icelandic recipients instead of non-residents. 

Other debt securities (not exempt from non-resident withholding tax)

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

0%a

Non-residents of Iceland

N/A

N/A

N/A

Residents of Double Taxation Treaty (DTT) countries

N/A

N/A

N/A

Tax-exempt entities

N/A

N/A

N/A

Icelandic banks complying with Article 3.2 of Act no. 94/1996

N/Ab

N/A

N/A

a. Clearstream Banking applies 0% withholding tax by default on coupon payments from the above-mentioned debt securities. However, even if no withholding tax will be withheld through Clearstream Banking on income distributions on taxable debt securities, withholding tax may still be payable on interest and redemption payments. Clearstream Banking does not assist in this regard. Please consult your tax advisor for full information.
b. Customers that are Icelandic Banks complying with Article 3.2 of Act no. 94/1996 will by default receive income payments with 0% withholding tax. Certification is however requested from such customers for reporting purposes to ensure such entities are reported as Icelandic recipients instead of non-residents. 

Icelandic equities

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

22%

Non-residents legal entity

No

N/A

Yes

Residents of Double Taxation Treaty (DTT) countries

No

N/A

Yes

Tax-exempt beneficial owners

No

N/A

Yes

Icelandic banks complying with Article 3.2 of Act no. 94/1996

No

N/A

No

Capital gains tax

Debt securities exempt from non-resident taxation on capital gainsa

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

0%

Non-residents of Iceland

N/A

N/A

N/A

Icelandic banks complying with Article 3.2 of Act no. 94/1996

N/A

N/A

N/A

a. Exempt debt securities (exemption from non-resident taxation) are those falling under scope of Article 1 of Act. no. 39/ 2013, Article 1 of Act no. 53/2014 and Article 1 of Act no. 107/2015.

Other debt securities (not exempt from non-resident withholding tax)

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

0%a

Non-residents of Iceland

N/A

N/A

N/A

Residents of Double Taxation Treaty (DTT) countries

N/A

N/A

N/A

Tax-exempt entities

N/A

N/A

N/A

Icelandic banks complying with Article 3.2 of Act no. 94/1996b

N/A

N/A

N/A

a. Clearstream Banking applies a 0% tax by default on gains from transactions from the above-mentioned debt securities. However, even if no capital gains tax will be withheld through Clearstream Banking on capital gains derived from taxable debt securities, capital gains tax may still be payable on capital gains derived from taxable debt securities. Clearstream Banking does not assist in this regard. Please consult your tax advisor for full information.
b. Customers that are Icelandic Banks complying with Article 3.2 of Act no. 94/1996 will by default receive income payments with 0% withholding tax. Certification is however equested from such customers for reporting purposes to ensure such entities are reported as Icelandic recipients instead of non-residents. 

Icelandic equities

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Yes

0%

Non-resident legal entity

N/A

N/A

N/A

Residents of Double Taxation Treaty (DTT) countries

N/A

N/A

N/A

Tax-exempt beneficial owners

N/A

N/A

N/A

Icelandic banks complying with Article 3.2 of Act no. 94/1996

N/A

N/A

N/A

Stamp Duty

There is no stamp duty withheld through Clearstream Banking on securities held in Clearstream Banking. Stamp duty may however be payable on specific transactions. Clearstream Banking does not provide assistance in this regard. Please consult your tax advisor for further information.

Notes on tax reclaims

Customers warrant the completeness and accuracy of the information they supply to Clearstream Banking.

It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Clearstream Banking is under no obligation to carry out any investigation in respect of such information.

With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country.