Tax Audit Rights
Written in plain language for general understanding. This is educational content, not legal advice. Based on Icelandic Acts of the Althingi, statutory instruments, and official guidance.
Icelandic National Law
What is this right?
As a taxpayer, you have rights during a tax audit:
- Written notice: Audits are conducted through formal written communication with strict procedural rules.
- Right to representation: A representative (accountant or lawyer) can act on your behalf with written authorisation.
- Right to appeal: You can challenge audit results through the same two-tier administrative process (RSK, then Yfirskattanefnd) plus two judicial levels.
Statute of limitations for reassessment:
- 2 years — if you filed returns properly with all necessary information.
- 6 years — standard limitation period.
- 10 years — for income and assets in low-tax jurisdictions.
When does it apply?
- RSK selects your return for examination — either through electronic screening or formal supervisory plans.
- Audits can range from a few weeks to over a year in duration.
What should you do?
- Respond to all written communications from RSK within the stated deadlines.
- Consider engaging a tax advisor or accountant to assist you.
- Keep all records organised — payslips, receipts, bank statements, and prior tax returns.
What should you NOT do?
- Don't ignore RSK communications — failure to respond can result in an estimated assessment that may be higher than your actual liability.
- Don't destroy records — you should retain tax records for at least 6 years.
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