News Share

The Tax Hub

Daily Tax Newsletter


Responsive image

Icelandic Parliament Passes Legislation on Measures Countering BEPS

On 13 October 2016, the Icelandic parliament passed legislation on government actions against tax evasion. Two of the main measures include new interest deduction limitations rules based on BEPS Action 4 and Country-by-Country (CbC) reporting requirements based on BEPS Action 13.

Interest Deductions

The legislation includes the introduction of an interest deduction limitation equal to 30% of EBITDA. However, certain exemptions are provided, including where:

  • The taxpayer's total related party interest expense/deduction is less than ISK 100 million (~USD 875,000);
  • The creditor is subject to tax in Iceland;
  • The equity ratio of the taxpayer is not lower than 2% below its group equity ratio (subject to certain restrictions); or
  • The taxpayer is a financial institution or insurance company, or a company owned by a financial institution or insurance company and involved in similar operations.

The interest deduction limitation will enter into force on 1 January 2017. Additional regulation on the implementation of the deduction limit will be issued by the Minister of Finance in the future.

CbC Reporting

The legislation includes the requirement that MNE groups operating in Iceland must submit a CbC report if meeting an ISK 100 billion (~USD 875 million) consolidated annual revenue threshold. The requirement to submit primarily applies to ultimate parent entities resident in Iceland. In cases where the ultimate parent of the group is not resident in Iceland, an Icelandic constituent entity of the group will be required to submit the CbC report if:

  • The ultimate parent is not required to submit a CbC report in its jurisdiction of residence;
  • The ultimate parent's jurisdiction of residence does not have an information exchange agreement with Iceland that provides for the exchange of CbC reports; or
  • The tax authority has notified the Icelandic constituent entity that there was a failure to exchange.

If there is more than one Icelandic constituent entity, only one is required to submit the report.

Whether the CbC report will be filed locally or overseas, notice of the reporting entity must be submitted to the tax authority by the end of the fiscal year concerned.

The CbC reporting requirements will enter into force 1 January 2017. Additional details of the requirements, such as content requirements, are not included in the legislation and will be issued through regulation from the Minister of Finance in the future.

Other Measures

The legislation also includes a number of other measures, including:

  • The introduction of a definition of permanent establishment into law based on the OECD Model;
  • The extension of the statute of limitations regarding reassessment and penalties in relation to taxable income and assets in low-tax countries from the standard six years to ten years; and
  • The strengthening of rules regarding customs.

Click the following link for the legislation on government actions against tax evasion (Icelandic language).

Powerful Tax Tools


FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.


Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.


Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.


Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.


Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.



Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.


Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.


Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.


Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.


Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.


Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.


Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.


VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.


NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.


Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.


Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Compare Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More