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12.4.2. Specific TP Issues

The domestic law of Iceland does not provide any specific rules for determining the arm’s length price for transactions involving intra-group services, intangible property, and cost contribution agreement and relies on the OECD transfer pricing guidelines,

Permanent Establishment (‘AOA Approach’)

Under the Authorized OECD Approach (AOA), the OECD has published guidelines for the allocation of profits to permanent establishments. Currently, there are four tax treaties of Iceland that have incorporated the latest Authorised OECD Approach (AOA) which is based on Article 7 of the OECD Model Tax Convention as amended in 2010. Most of Iceland’s tax treaties have not yet incorporated the latest AOA, and continue to use the pre-existing version.