13 October 2022

Australia signs tax treaty with Iceland

The Albanese Government has signed a new tax treaty with Iceland, the first of its kind between the two nations. Once in force, the treaty will facilitate cross‑border trade and investment and enhance the economic relationship between Australia and Iceland.

The treaty will make it easier for Australian companies to access capital and export to Iceland through reduced withholding tax rates.

By giving effect to the G20/OECD Base Erosion and Profit Shifting recommendations, the treaty is a demonstration of the Albanese Government’s commitment to tax integrity.

The treaty will also provide more certainty and reduced compliance costs for Australians and Australian businesses who earn income here and in Iceland.

Once the domestic implementation requirements have been completed the treaty will enter into force.

A summary of the main features of the new treaty is available on the Treasury website.

Quote attributable to Assistant Minister for Competition, Charities and Treasury Andrew Leigh:

“This is a great step forward for Australia and Iceland’s economic relationship. It will help to build the trade and investment relationship between our nations.”

“This treaty demonstrates the commitment of the Albanese Government to enhancing tax integrity by incorporating measures to prevent international tax avoidance.”