The parliament has approved the Budget for 2018 and it has implemented an overall increase in withholding tax rates effective 1 January 2018 as follows:

  • the standard rate of withholding tax on Icelandic interest, capital gains and dividend income has increased from 20% to 22%;
  • the non-resident rate applicable to dividend income increased from 18% to 20%;
  • the non-resident rate applicable to interest income has increased from 10% to 12%;
  • the non-resident rate applicable to royalties income has increased from 20% to 22%;
  • the non-resident rate applicable to technical services fees increased from 20% to 22%; and
  • the non-resident rate applicable to capital gains on share has increased from 20% to 22%.