Iceland Non-Resident Withholding Tax (Afdrattarskattur) Calculator
Determine statutory withholding taxes on cross-border dividends, interest, and royalties under Act No. 90/2003 and bilateral tax treaties.
Direct Statutory Calculation Result
Calculation Parameters (Skatturinn & Alþingi Statutory Codes)
Statutory Itemized Breakdown
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Frequently Asked Statutory Questions
What is the statutory withholding tax rate on dividends in Iceland?
Under Act No. 90/2003, dividends paid by an Icelandic company to a non-resident corporate entity are subject to 21% withholding tax (afdrattarskattur), while dividends paid to non-resident individuals are taxed at 22%.
Are corporate dividends within the EEA exempt from withholding tax?
Yes. Under Icelandic tax legislation aligning with the EU Parent-Subsidiary Directive, dividends paid to a corporate parent resident in an EEA member state are eligible for a 100% tax reimbursement or exemption upon approval from Skatturinn.
What is the withholding tax rate on interest payments?
Interest paid to non-resident legal entities or individuals is subject to a flat 12% statutory withholding tax, unless reduced by an applicable bilateral double tax treaty.
How can foreign beneficiaries obtain reduced treaty rates?
To apply a reduced treaty rate at source, the Icelandic paying company must submit form RSK 5.42 together with a certified Certificate of Tax Residence from the foreign beneficiary tax authority before the remittance is processed.
What is the withholding tax on royalty payments?
Royalties paid for the use of patents, trademarks, or copyrights to non-resident entities are subject to a statutory withholding tax of 21% (for legal entities) or 22% (for individuals), subject to treaty reductions (typically 0% to 5%).
Engr. Muhammad Shahzad
Verified Fiscal & Statutory AlgorithmistLead software architect and statutory modeling specialist with over a decade of experience designing enterprise-grade algorithmic frameworks, double-entry financial models, and statutory compliance engines across European and global regulatory jurisdictions.
Engr. Muhammad Shahzad
Principal Financial Systems Architect & Nordic North Atlantic & Icelandic Fiscal Framework Architect
Lead software and systems architect specializing in high-performance browser computing, algorithmic validation, financial models, and zero-telemetry client-side privacy architecture.