New plans to combat Icelandic tax-haven tax evasion

The Icelandic Finance Ministry.

The Icelandic Finance Ministry. Photo: Iceland Monitor/Ernir

Iceland’s Finance Minister has put forward proposals to combat tax evasion, in response to recent revelations of Icelandic interests in tax havens around the world.

The new plans are part of the “Icelandic government’s immediate and unequivocal response” to recent Panama Papers revelations of Icelandic assets in tax havens and possible tax evasion, according to a press release from the Finance Ministry.

Bjarni Benediktsson is Iceland's Minister for Finance and Economic Affairs.

Bjarni Benediktsson is Iceland's Minister for Finance and Economic Affairs. Photo: Iceland Monitor/Árni Sæberg

The changes proposed by the Minister’s new bill include:

  • restrictions on transferring legal domicile and assets to low-tax countries
  • clarification of controlled foreign corporation (CFC) rules for taxing those with assets in low-tax countries
  • an extension of the period of time (from six to ten years) available for reassessing tax on income and assets in low-tax countries which have not been correctly declared
  • tougher sanctions for providing incorrect information when importing assets
  • greater tax-collector access to information on taxpayers’ asset situation
  • better analysis and risk management
  • a review of reporting obligations on financial institutions and lawyers
  • limits on loss deductions for companies in low-tax countries
  • limits on cross-border mergers and splits.

The Minister has also set up a working group to come up with proposals to amend relevant laws, regulations and procedures, as part of further government action to fight tax evasion and the use of tax havens generally.

Exchange rates

USD USD 107.69 EUR EUR 125.10
GBP GBP 142.73 DKK DKK 16.79
NOK NOK 13.25 SEK SEK 12.21
CHF CHF 108.21 JPY JPY 0.97
ISK price of selected currencies, according to the official exchange rate of the Central Bank of Iceland. Updated daily.

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Exchange rates

USD USD 107.69 EUR EUR 125.10
GBP GBP 142.73 DKK DKK 16.79
NOK NOK 13.25 SEK SEK 12.21
CHF CHF 108.21 JPY JPY 0.97
ISK price of selected currencies, according to the official exchange rate of the Central Bank of Iceland. Updated daily.