DT9452 - Iceland: Treaty summary
The table summarises the provisions of the treaty in force. Where a percentage rate is shown, this rate is the ‘treaty rate’ and does not reflect taxes chargeable under the domestic law of either state before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which the UK and Iceland are permitted to tax income in the relevant categories under the treaty. Rates chargeable under the domestic law of either state may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 15% (Note 1) | 10 |
| Dividends on direct investments | 5% | 10 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner must be a company (other than a partnership) which holds directly at least 10% of the capital of the payer | 10 |
| Property income dividends | 15% | 10 |
| Interest | 0% | 11 |
| Royalties | 0/5% (Note 2) | 12 |
| Government pensions | Taxable only in Iceland unless the individual is a resident and national of the UK | 18 |
| Other pensions | Taxable in Iceland (Note 3) | 17 |
| Arbitration | Yes | 23 |
Note 1: Dividends beneficially owned by a pension scheme are taxable only in the state in which the pension scheme is resident.
Note 2: The 5% withholding tax applies to the following royalties
- any information concerning industrial, commercial or scientific experience provided in connection with a rental or franchise agreement
- a trademark associated with an agreement referred to in sub-paragraph a)
- the copyright of a motion picture film or work on film or videotape or other means of reproduction for use in connection with television
Note 3: UK pensioners in receipt of a pension immediately before the entry into force of this Convention may make an irrevocable election for the provisions of Article 18 of the previous convention (SI 1981 No.2879) to continue to apply. Article 18 of the previous convention provided that Icelandic source pensions (other than government pensions) paid to residents of the UK were taxable only in the UK.