Introduction
Iceland, benefiting from its unique climate conditions and natural resource reserves, has gradually become one of the important mining bases for cryptocurrency. The cold climate provides excellent cooling conditions for mining machines, while Iceland’s abundant and inexpensive electricity resources, along with stable and friendly political policies, give it strong competitiveness in the cryptocurrency mining industry. As a sanctuary for the cryptocurrency sector and a base for global miners, Iceland’s tax system and regulatory dynamics have gained significant attention, which this article will explore.
Iceland’s Basic Tax System
Overview
Iceland boasts a relatively friendly tax environment and a well-established tax system. In recent years, the Icelandic government has focused on simplifying the tax system, lowering tax rates, and expanding the tax base, having signed double taxation avoidance agreements with over thirty countries, including China, the United States, and the United Kingdom. Iceland also offers tax incentives to attract foreign investments, such as tax reductions, cash subsidies, training assistance, and land leasing. The tax system in Iceland operates on both central and local levels. At the central level, taxpayers are required to pay corporate income tax, national personal income tax, value-added tax, environmental and resource taxes, customs duties, accommodation taxes, and national broadcasting fees. At the local level, taxpayers must pay municipal personal income tax, social insurance, municipal taxes, property taxes, stamp duties, and inheritance taxes. These tax types can be broadly categorized into direct and indirect taxes, with indirect taxes being the primary form of revenue in Iceland. Compared to other countries, the characteristics of Iceland’s tax system are simplicity and effectiveness, which enhance the attractiveness of foreign investment and the international competitiveness of domestic enterprises.