Iceland Transfer Pricing Documentation Requirements
Iceland requires transfer pricing documentation from entities with turnover or assets above ISK 1 billion that transact with foreign related parties. The documentation is produced within 45 days of a request, and administrative fines apply where the documentation obligation is not met, whether through intent or negligence.
Requirements at a glance
| Requirement | Threshold | Deadline | Deadline type | Language | Penalty |
|---|---|---|---|---|---|
TP documentation Required | Turnover or assets > ISK 1bn and intercompany transactions with foreign related parties | By tax return filing date | Preparation deadline The documentation must exist by the date shown and is produced only when the tax authority requests it. Once requested, it must be provided within 45 days. | IS / EN | Yes (administrative fines under Law No. 61/2021) |
CbC report Required | Group revenue ≥ EUR 750m | 12 months after fiscal year-end | Submission deadline The Country-by-Country report is filed by the group's ultimate parent entity; a local notification identifying the reporting entity is filed separately. | — | Yes |
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Scope of the documentation obligation
A documentation requirement applies to Icelandic entities with turnover or assets above ISK 1 billion that have intercompany transactions with foreign related parties. The rules came fully into force in 2015, when a regulation set out the information the documentation must contain, and the documentation requirements have not changed since. The documentation is held available by the return filing date and produced within 45 days of a request.
Distinctive features of the Icelandic regime
The defining feature of the Icelandic regime is the administrative-fine framework introduced by Law No. 61/2021, which created a basis for imposing fines on taxpayers that fail to meet their documentation obligations whether the failure was intentional or merely negligent. The documentation must not only exist but be satisfactory in the view of the tax authority, so the quality of the documentation, and not only its existence, bears on whether the obligation has been met. The threshold is set by reference to turnover or assets above ISK 1 billion combined with foreign related-party dealings.
Benchmarking and comparables
Iceland follows the OECD approach to documentation and comparability. Detailed local practice on the choice between local and foreign comparables, on single-year versus multi-year testing, and on the frequency of fresh searches is applied consistently with the OECD framework, and an entity within the threshold is expected to support its pricing with a comparability analysis on that basis.
Frequently asked questions
Does the quality of documentation matter in Iceland, not just its existence?
Yes. The documentation must be satisfactory in the view of the tax authority, so its adequacy, and not only the fact that it exists, bears on whether the obligation has been met and whether an administrative fine applies.
This guide is an informational research aid prepared by Comp-Press and is not tax or legal advice. Transfer pricing rules change; verify current requirements before relying on them for filing.