Prove the tax departure as well as registering the move
The Income Tax Act’s former-domicile rule can continue unlimited liability for three years from the next year-end after departure. The exception requires evidence of taxation in another state on a resident basis and compliance there. Registering an overseas address is useful evidence, but is not the entire statutory test.
| Issue | What it means | Action |
|---|---|---|
| Destination tax position | Certificate, filings and assessments where available | Establish resident-level taxation and actual compliance, not only an immigration card. |
| Departure chronology | Travel, housing, family and employment dates | Reconcile the claimed change with day counts and ongoing Icelandic ties. |
| Treaty position | Applicable treaty and income category | Residence and relief may need to be reconciled between the two countries. |
A departure checklist with dependencies
| Stage | Action | Watch point |
|---|---|---|
| Before the move | Review salary, investments, company roles and the destination’s arrival basis. | The same asset can have different tax values in the two countries. |
| At the move | Register the change through the appropriate route. | The official guide generally requires notification within seven days; Nordic moves use host-country registration. |
| Final payroll | Reconcile pay, pension, leave and withholding. | Retain final payslips and employer statements. |
| Tax filing | Arrange the departure-year return and a contact method. | Skatturinn’s temporary-worker guidance identifies RSK 1.13 or electronic filing; the correct return depends on the case. |
| After departure | Update banks, insurers and relevant agencies. | Check continuing source income and retain electronic access for notices. |
Changing your residence does not move every business obligation
A company can continue to be Icelandic-resident or have a local establishment after its shareholder moves. Conversely, exporting management or business assets can create company-level tax and filing questions. Compare the individual, each entity and each asset separately, including the destination’s tax basis and foreign-tax relief.
| Issue | What it means | Action |
|---|---|---|
| Icelandic property or income | Source-country obligations can survive departure. | Do not cancel all filing arrangements merely because residence ended. |
| Company management | Where strategic and executive decisions will occur | Update operating practice and documentation together. |
| Business asset transfer | Valuation, tax value, recipient and retained Icelandic activity | Obtain transaction-specific advice before signing. |
| Personal investments | Preserve acquisition history and any relief previously claimed | No blanket personal exit-tax exemption is asserted by this guide. |
Protect a right to return if you need one
Permanent-residence and citizenship residence clocks have different absence rules. The permanent-permit guidance permits up to eighteen months abroad within four years, while registration abroad for eighteen continuous months causes automatic revocation. Citizenship continuity has its own shorter annual absence test. Check the exact status before planning an extended period away.
Sources & research notes8 references
Sources supporting this guide. Research draft awaiting editorial review.
- Skatturinn — individual tax liability, including arrival and departure
- Iceland — Income Tax Act 90/2003, current consolidated text
- Registers Iceland / Ísland.is — moving and registering an address
- Skatturinn — posted workers and departure tax-return procedure
- Nordic Council of Ministers — moving from Iceland
- Skatturinn — controlled foreign companies: scope, control and exceptions
- Directorate of Immigration — permanent residence and absence limits
- Directorate of Immigration — when a person can apply for citizenship