Tax Payment Plans
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?
If you owe taxes and cannot pay in full, you may be able to arrange an instalment payment plan:
- Eligibility: All tax returns and required documents must have been filed. Debt must be below ISK 2,000,000 for individuals (ISK 10,000,000 for businesses).
- Application: Apply online via island.is.
- Interest: Interest on arrears continues to compound during the payment plan.
- Limitation period: Signing a plan interrupts the limitation period — a new 4-year period starts.
- No collection action (seizure or attachment) must have already commenced.
When does it apply?
- You have outstanding tax debt and cannot pay the full amount immediately.
- Your tax debt is under ISK 2,000,000 (individual threshold).
What should you do?
- File all outstanding tax returns first — you cannot get a payment plan with unfiled returns.
- Apply online through the island.is portal or contact RSK directly.
- Make all scheduled payments on time — a single missed payment can terminate the plan.
What should you NOT do?
- Don't ignore tax debt — RSK can pursue attachments, seizures of property, and forced sales.
- Don't miss payments under the plan — automatic termination triggers RSK to resume collection.
- Don't accumulate new tax debt during the plan — new unpaid assessments also trigger termination.
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