Income tax on rent, worked example, in Iceland
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| Non-resident couple´s rental income1 | ||||
| Monthly Rental Income2 | 1,500 | 6,000 | 12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| = Taxable Income | 50% | 9,000 | 36,000 | 72,000 |
| Income Tax4 | ||||
| Flat rate | 22% | 1,980 | 7,920 | 15,840 |
| Annual Income Tax Due | 1,980 | 7,920 | 15,840 | |
| Tax Due as % of Gross Income | 11.00% | 11.00% | 11.00% | |
Notes
1 The property is jointly owned by husband and wife.
2 Exchange rate used: 1.00 EUR = 115.00 ISK
3 For long-term lease of residential properties, only 50% of gross income is taxable.
4 Rental income earned by nonresident individuals is taxed at a flat rate of 22%.