Iceland vs Denmark
Tax Rate Comparison
Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.
๐ฐ Personal Income Tax Calculator
Enter your income to see your estimated annual tax liability in each country โ side by side.
๐ฎ๐ธ Iceland โ Municipal Income Tax
Iceland's 69 municipalities set their own local income tax rates, ranging from ~12.44% to ~14.52%, averaging ~14.45%. This is added to the national income tax. The combined effective rate for most earners is about 36.94% (national + municipal). Iceland has no inheritance tax on direct heirs. Real estate transfer tax (stimpilgjald) is 0.8% on property transfers. Iceland is not an EU member but belongs to the EEA, affecting VAT and trade rules.
๐ฉ๐ฐ Denmark โ Municipal Income Tax
Denmark's 98 municipalities set local income tax (kommuneskat) at ~22.8%โ27.8%. The national state tax adds 15% (top bracket). Combined rates including AM contribution (8% of gross) make Denmark one of the world's highest-tax nations at ~55โ56% effective top. Church tax (~0.7%) applies to members. Property value tax is nationally set.
Iceland vs Denmark: Key Tax Differences (2026)
๐ฐ Income Tax: ๐ฉ๐ฐ Denmark has a higher top income tax rate (~36.94% vs ~55.9%). ๐ฎ๐ธ Iceland is more favourable for high earners.
๐ VAT/Sales Tax: Denmark has a higher consumption tax (11โ24% vs 25%).
๐ข Corporate Tax: ๐ฎ๐ธ Iceland offers a lower corporate rate (20% vs 22%), which can influence business location decisions.
๐ Capital Gains: ๐ฎ๐ธ Iceland taxes investment gains at a lower rate (22% vs 42%), benefiting investors.