The income and capital tax treaty between Austria and Iceland was signed on 30 June 2016. The treaty 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 will enter into force on the first day of the third month following the exchange of the ratification instruments, and will apply from 1 January of the year following its entry into force.
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