The income and capital tax treaty between Austria and Iceland will enter into force on 1 March 2017. The treaty, signed 30 June 2016, is the first of its kind between the two countries.
The treaty covers Austrian income tax and corporation tax. It covers Icelandic income taxes to the state and to the municipalities, and net wealth taxes to the state.
The following capital gains derived by a resident of one Contracting State may be taxed by the other State:
Gains from the alienation of other property by a resident of a Contracting State may only be taxed by that State.
Iceland applies the credit method for the elimination of double taxation, while Austria generally applies the exemption method. However, Austria will apply the credit method in respect of income taxed in Iceland in accordance with the provisions of Articles 10 (Dividends) and 12 (Royalties).
The treaty applies from 1 January 2017 (1 January of the year following the latter notice of ratification, which was given 28 December 2016).
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