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Iceland vs Estonia
Tax Rate Comparison

Enter your income below for a personal tax estimate, then scroll down for full rate breakdowns.

๐Ÿ‡ฎ๐Ÿ‡ธ Iceland
vs
๐Ÿ‡ช๐Ÿ‡ช Estonia
Tax Year:

๐Ÿ’ฐ Personal Income Tax Calculator

Enter your income to see your estimated annual tax liability in each country โ€” side by side.

Enter your annual income above to see your personal tax comparison โ†’
Individual Income Tax (Top Marginal Rate)
Top Income Tax Rate
~36.94%
Stable; municipal rates adjusting slightly
No change
22%
22% national + local supplement; defence spending driving rate increases
No change
VAT / GST / Sales Tax
VAT / GST / Sales Tax
11โ€“24%
Standard 24% maintained; EEA rules apply
No change
9โ€“24%
24% standard; defence-driven fiscal pressure
No change
Corporate Tax Rate
Corporate Tax Rate
20%
20% stable
No change
22%
22% on distributed profits; retained earnings still 0%
No change
Capital Gains Tax
Capital Gains Tax
22%
22% capital income rate
No change
22%
22% as income
No change
Social Security & Payroll
Social Security / Payroll
~14.5%
Pension reform debate; high mandatory rates maintained
No change
~33%
33% social tax maintained; III pillar voluntary pension growing
No change
State, Regional & Local Taxes

๐Ÿ‡ฎ๐Ÿ‡ธ 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.

๐Ÿ‡ช๐Ÿ‡ช Estonia โ€” Local Income Tax Supplement

Estonia's 79 local governments levy a local income tax supplement of 11.4% of taxable income (2024), collected alongside the national 20% income tax. Together these form the effective total income tax. Estonia's unique fully distributed profit taxation system means companies pay no corporate income tax on retained earnings โ€” only on distributed profits (dividends). This has driven significant foreign investment. Land tax (maamaks) is levied at 0.1%โ€“2.5% of assessed land value by municipalities.

โš ๏ธ Disclaimer: Rates shown are standard top/headline rates for informational purposes. Actual tax liability depends on income level, residency, deductions, and tax treaties. 2025โ€“2026 data reflects announced or enacted rates and may be subject to change. Not financial or legal advice.

Iceland vs Estonia: Key Tax Differences (2026)

๐Ÿ’ฐ Income Tax: ๐Ÿ‡ฎ๐Ÿ‡ธ Iceland has a higher top income tax rate (~36.94% vs 22%). ๐Ÿ‡ช๐Ÿ‡ช Estonia is more favourable for high earners.

๐Ÿ›’ VAT/Sales Tax: Both countries have comparable consumption tax rates (11โ€“24% vs 9โ€“24%).

๐Ÿข Corporate Tax: ๐Ÿ‡ฎ๐Ÿ‡ธ Iceland offers a lower corporate rate (20% vs 22%), which can influence business location decisions.

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