Do I have to file at home while living in Iceland?
It depends on residence, not on address — except for US citizens and green-card holders, for whom the answer is yes regardless of where they live. We settle the residence question first, because every other answer follows from it.
Is there a treaty between my country and Iceland?
Treaty networks change with each protocol and each multilateral-instrument position, so we confirm the treaty in force for your specific year with the issuing authority rather than relying on a published summary. Where there is none, unilateral relief and domestic law do the work instead.
I own property in Iceland. Where is the rent taxed?
Where the property is. That is close to universal, and it usually arrives as withholding on the gross rent rather than as a return on the profit — which is why the election onto a net basis, where Iceland offers one, is normally the first thing to check. Your home country taxes the same rent and credits what was paid.
Do I pay Icelandic tax on a short work assignment?
Not automatically, and the answer turns on several facts rather than one. A short assignment can stay taxable only at home where the stay sits inside the day count the treaty article sets, the employer is not resident in Iceland, and the cost of your salary is not borne by an Icelandic branch or host entity. Fail any one of those and the ordinary employment article applies instead, giving Iceland the right to tax the days worked there. Count the days before you travel and keep the recharge arrangements in writing, because an intercompany recharge to an Icelandic host is the condition clients most often trip over without realising it has been triggered.
Does a posting to Iceland end my Canadian tax residency?
Leaving does not end it by itself. Residence is decided by ties and, where two countries both claim you, by the treaty tie-breaker — never by the address on your post. A posting that leaves a home, a spouse or the bulk of your economic life in Canada normally leaves you resident throughout. That matters more than it sounds, because a resident reports worldwide income: Icelandic salary goes onto the Canadian return as well, with relief for Icelandic tax rather than exemption from reporting it. Settle the residence question first and put the reasoning in writing. Every other line on both returns follows from that single answer.
My employer has no office in Iceland, does that help?
It is one of the conditions for short-assignment treatment, not the whole test. The article also asks how long you are present and who ultimately bears the cost of your remuneration. An employer with no fixed place of business in Iceland satisfies one limb, but if an Icelandic company is invoiced for your time, or directs your work as though you were its own staff, the relief can fall away even though your payslip says otherwise. Gather the service agreement, the invoices and the reporting lines before assuming the position holds, because those are the documents the Icelandic authorities look at rather than the payslip.
I let a flat in Iceland. Where do I declare the rent?
In both places, usually. Income from immovable property is taxable in the country where the property stands, so Iceland taxes the rent at source whatever your residence. If you remain resident in Canada or are a United States citizen, the same rent also belongs on the home return, with relief given for the Icelandic tax rather than an exclusion. The two computations rarely match, because each system has its own rules on which expenses are deductible and over what period a building is written down. Keep one set of records that can be recast into both formats, and reconcile them annually rather than at the point of sale.
Icelandic payroll deducted tax, do I still file at home?
Yes, if you are still resident at home or hold United States citizenship. Withholding is a method of collection, not a settlement of the liability, and it says nothing about whether a return is due elsewhere. The home return still reports the salary, and relief for the Icelandic tax is claimed on it. Deducting the right amount in Iceland does not close the file, and an over-deduction is recovered by filing rather than by asking payroll. Where the assignment ends mid-year the two calendars rarely align neatly, so the order in which the returns are prepared decides how much relief actually lands.
Can a treaty stop the same salary being taxed twice?
It relieves double taxation rather than preventing it arising. The usual pattern is that one country taxes first because the work was done there, and the country of residence then gives credit for that tax against its own charge on the same income. The credit is limited to the residence country's own tax on that slice, so if the source country charges more, the difference is not always recovered. Timing matters as much as arithmetic: relief is normally given for foreign tax on the income of the same period, and an assignment that straddles two years can leave credit stranded unless the returns are sequenced deliberately.
What happens if I have not filed for several years?
Missed years are handled as one package, not one at a time, because the route chosen for the first year determines the relief available for the rest. Each country has a disclosure or relief programme with its own conditions, and entering the right one — before the authority contacts you — is usually what keeps penalties down. Filing quietly outside a programme forfeits that protection. See catching up on missed returns.
I work remotely from another country for a company back home — who taxes me?
Usually the country you are physically in, because employment income is generally sourced where the work is done, with your residence country taxing it as well if you are resident there and giving credit. Three things follow: your employer may acquire withholding and social security obligations where you sit, a treaty tie-breaker may be needed if both countries call you resident, and a short trip that becomes a long stay can cross a residence threshold nobody was watching. See remote workers and digital nomads.
