Icelandic rules providing for immediate taxation of companies and shareholders upon the movement or transaction of companies from Iceland to another EEA State are not in line with the EEA Agreement. This is the conclusion of a reasoned opinion delivered by the EFTA Surveillance Authority.

The Icelandic tax system requires immediate recovery of tax when companies transfer their registered seat from Iceland to another EEA State, divide cross-border or transfer assets for use outside Iceland. The Authority considers such immediate recovery of an exit tax, without the possibility of a deferral, to be in breach of the freedom of establishment and the free movement of capital. The Authority is also of the opinion that Iceland is in breach of the freedom of establishment by requiring guarantees in cases of cross-border mergers when the amount of the deferred tax exceeds 50 million ISK (approx. 355 000 EUR), without any prior assessment of the risk of non-recovery.

Informatiesoort: Nieuws

Rubriek: Europees belastingrecht

H&I: Previews


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