Australia and Iceland have signed a new tax treaty, which following its entry into force, will represent the first tax treaty between the two countries.
The new tax treaty, the Convention between Australia and Iceland for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance and its associated Protocol was signed on 12 October 2022 in Reykjavik, Iceland by Her Excellency Kerin Ayyalaraju, Australia’s Ambassador to Denmark, Norway and Iceland.
The tax treaty will make it easier for Australian companies to access capital and export to Iceland through reduced withholding tax rates. The treaty will also provide more certainty and reduced compliance costs for Australians and Australian businesses who earn income here and in Iceland.
