Iceland
Volcanic island in the North Atlantic with dramatic landscape, geysers and glaciers. Expensive but safest country in the world. Not EU but EEA/Schengen. Excellent English proficiency. Small, tightly-knit community.
Important Notice: No Individual Advice
The information provided is for general informational purposes only and does not constitute individual legal, tax, or financial advice. Please consult qualified professionals for personal decisions.
Key Metrics
Cost of Living
Cost Breakdown
Quality of Life
Taxes
Tax information for Iceland
Tax resident if domiciled or staying >183 days (center of life)
2025
March 31st of following year
No - worldwide income
Icelandic Tax System: National + Municipal
3 brackets: 22.75% (up to ISK 5,664,060), 23.05% (up to ISK 15,901,524), 31.35% (above). This is ONLY national tax.
Flat rate avg 14.94% (varies 12.44-14.94% by municipality). Added to national tax → Total burden 31.5-46.3%.
ISK 932,604/year (~€6,100) tax-free. Deducted proportionally monthly. Transferable between spouses.
Employee: 4% pension. Employer: 6.35% social + 8% pension. NOT included in income tax table!
Income Tax
COMBINED: National tax (22.75%/23.05%/31.35%) + municipal tax (avg 14.94%). Personal allowance: ISK 932,604/year (~€6,100). NOTE: Table shows total tax burden!
| From | To | Rate |
|---|---|---|
| €0 | €5,664,060 | 31.49% |
| €5,664,060 | €15,901,524 | 37.99% |
| €15,901,524 | Unlimited | 46.29% |
Total Tax Rate by Income
National (22.75-31.35%) + Municipal (avg 14.94%) = 31.49-46.29% (2025, EUR)
Pension Tax
Pensions taxed as employment income (progressive, 31.49-46.29%)
Capital Gains Tax
22% flat tax on all capital income (dividends, interest, stock gains)
Dividend Tax
22% withholding tax on dividends
VAT
24%Important Notice
This is not tax advice. Icelandic taxes calculated in ISK. Consult an Icelandic tax advisor (Endurskoðandi).
This is not tax, legal, or investment advice. Tax laws change frequently and can be complex. The information provided is for general informational purposes only. Please consult a tax advisor licensed in Iceland for your specific situation.
Healthcare
Healthcare in Iceland
Universal public healthcare system for all residents. Tax-funded. Landlæknisembættið (Directorate of Health) coordinates the system.
No private insurance required. Public system covers everything. Private supplementary insurance exists but rarely used (~5%).
Expat Access
EU/EEA citizens: Full access with European Health Insurance Card (EHIC). After registration with Sjúkratryggingar (Iceland Health Insurance): Kennitala (ID number) required.
Very limited as public system excellent. Some private clinics in Reykjavik. Dentistry mostly private.
Not required - public system is world-class. Optional: Travel insurance for evacuation in severe cases (nearest specialist hospital often in Denmark/Norway).
Costs
Education & Childcare
Education system in Iceland
Excellent Scandinavian education system with free schools and universities. Small class sizes and individual support. Teaching mainly in Icelandic, but excellent English proficiency among all.
Childcare
In Reykjavik moderate waiting lists (3-6 months). Smaller municipalities often immediately available. Registration after birth recommended.
Primary & Secondary School
International schools
Higher Education
Háskóli Íslands (University of Iceland) is largest uni. EU/EEA citizens: Only registration fee (~€500). Many Master's programs in English. Small university = personal attention.
For Expat Families
Well accessible. Public schools accept international children. International School of Iceland (IB) in Reykjavik. Small community = quick integration.
Icelandic as Second Language (Íslenska sem annað mál) in public schools. Intensive language courses available. Children learn Icelandic surprisingly fast.
For full integration: public school + Icelandic intensive course. For international career path: International School of Iceland (IB). Children integrate quickly in small community!
Pros
- •Free public schools and universities
- •Small classes with individual attention
- •Excellent English proficiency among all Icelanders
- •Safe environment - children can go to school independently
Cons
- •Learning Icelandic is challenging (complex grammar)
- •Only one international school (Reykjavik)
- •Few university options in country
Notes
Iceland's education system is excellent but small. The University of Iceland (Háskóli Íslands) is the main university with ~15,000 students. For specialized programs, many Icelanders go to Denmark, Norway or UK. Children integrate quickly - the small community is very inclusive. Icelandic is hard, but English is available everywhere.
Language & Communication
Communication in Iceland
Icelandic is the official language, but almost all Icelanders speak fluent English. Small language community (~380,000), but strong linguistic identity. No Icelandic needed for daily life, but required for naturalization.
English Proficiency
98% of the population speaks English. Tourism and international business make English commonplace. Nordic countries traditionally have excellent English skills.
No difference - almost everyone speaks English even in rural areas.
Government Services
Most government services available in English. Ísland.is portal has English version. Tax authority (Skatturinn), Immigration (UTL) offer English services.
Good digital services. Ísland.is as central portal. Skatturinn for taxes. UTL for residence. Forms often available in English.
Daily Life & Communication
Easy in English. Supermarkets (Bónus, Krónan, Hagkaup) have English-speaking staff. Restaurants in Reykjavik mostly English-speaking.
Strætó (bus company) in Reykjavik has English info. App in English. No subway or train - bus and car are main transport.
Doctors speak English. Heilsugæslan (health centers) have English-speaking staff. Pharmacies understand English.
All banks (Landsbankinn, Íslandsbanki, Arion) offer English services. Online banking in English. Account opening requires Kennitala (ID).
Work Environment
English is standard in international companies. Local businesses often use Icelandic internally but English for international communication.
Growing tech scene in Reykjavik. CCP Games (EVE Online), Monerium, Controlant. Tourism and fishing important industries.
Expat Community
Growing expat community, especially from Poland and other EU countries. International community in Reykjavik.
Expats in Iceland (Facebook), InterNations Reykjavik, Ísland.is for government info in English.
Learning the Local Language
Icelandic courses at University of Iceland (often free for residents). Icelandic Online (free). Tin Can App.
Not needed for daily life (almost everyone speaks English). Important for naturalization and deep integration.
Tips
- 💡Icelanders greatly appreciate foreigners learning Icelandic - even just basics
- 💡Surnames follow patronymic system: Jón Jónsson = Jón, son of Jón
- 💡Everyone is addressed by first name - even doctors and ministers
- 💡The language has barely changed in 1,000 years - Viking heritage!
Pros
- •Almost everyone speaks excellent English - no Icelandic needed for daily life
- •Small, tight-knit society - quick integration possible
- •Nordic efficiency - many government services available in English
Cons
- •Icelandic is one of the hardest languages for Germans
- •Small language community - limited learning resources
- •Icelandic test required for naturalization
Notes
Icelandic is a fascinating but very difficult language with complex grammar (4 cases, many exceptions). Good news: Almost all Icelanders speak fluent English, so daily life is easy.
Climate Change & Future Outlook
Climate risks in Iceland
Iceland's climate risks are unique: volcanic eruptions, glacial floods (Jökulhlaup), and Arctic storms instead of classic climate risks. No heat, minimal drought issues. Global warming dramatically accelerates glacier melt (-700km² since 1890). Very high adaptive capacity through developed infrastructure and small, agile society.
Climate Scenarios
Switch between IPCC SSP pathways
SSP2-4.5
Current policy trajectory – ~2.7°C warming by 2100, moderate mitigation.
Values are approximations relative to our SSP2-4.5 baseline. They illustrate directional change, not exact national projections.
Overall Climate Risk
Projected risk index (0 = low risk, 100 = extreme risk)
Risk Categories
City-level climate outlook
Localized projections for the key expat metros in Iceland.
Reykjavík is the world's northernmost capital, located on the volcanically active Reykjanes Peninsula. Arctic storms are frequent, but geothermal energy heats 100% of buildings. The nearby volcanic fissure (Fagradalsfjall 2021, 2022) demonstrates geological activity.
Gulf Stream moderates climate
Arctic storms frequent
Fagradalsfjall 30km away
- •100% geothermal district heating - no heating cost crisis possible
- •Veðurstofa 24/7 volcano monitoring with SMS alert system
- •Grindavík (Reykjanes) was evacuated 2023-24 - earthquake risk!
- •Wind gusts can reach 150+ km/h - hold car doors tight!
Akureyri lies sheltered in Iceland's longest fjord, giving it milder climate than Reykjavík. Fewer storms, more snow in winter. No nearby volcanic risk. The 'Capital of the North' offers quieter living.
Fjord protection from wind
More snow than Reykjavík
No active volcanoes nearby
- •Geothermal district heating like Reykjavík
- •Winter road service well established
- •Polar night: December only 2-3h twilight
- •Eyjafjörður can become dangerous in storms (boating)
Personal climate risk assessment
Tune the analysis to your health profile and comfort level.
Age group
Sensitivity
Risk tolerance
Personalized risk index
Current level: Moderate
Priority risks
Extreme Weather
Base 62 → Personal 62
Floods & Coastal
Base 58 → Personal 58
What to prioritize
- •Look for reliable shelter options and emergency communication plans.
- •Prefer elevated districts and buildings with flood-mitigation infrastructure.
- •Budget for higher insurance/utilities and diversify income streams against climate shocks.
Adaptation Measures
- •Veðurstofa (Met Office): 24/7 volcano and weather monitoring
- •Almannavarnir (Civil Protection): Evacuation plans for volcanic areas
- •Klimaaðgerðaáætlun 2020-2030: Climate neutrality by 2040
- •100% renewable energy (geothermal + hydropower)
- •Vedur.is and SafeTravel.is apps for real-time warnings
- •Vitamin D supplementation in winter essential
- •Storm-proof clothing and 4x4 vehicle
Climate Resilience
Very high resilience despite extreme natural hazards. Small, well-organized society with excellent infrastructure. World-leading in volcanology and climate research. 100% renewable energy. Only weakness: dependency on few transport routes.
Tips
- 💡Check SafeTravel.is before every trip - LIFESAVING!
- 💡Volcanic eruptions: ALWAYS follow evacuation instructions
- 💡Winter = extreme darkness + storms. Bring SAD lamp!
- 💡Never cross rivers without local advice (glacial water!)
Pros
- •No heat - perfect for heat refugees
- •Purest water in the world
- •100% renewable energy
- •World's best volcano/weather monitoring
Cons
- •Volcanic eruptions - real, unpredictable risk
- •Extreme winter storms (150+ km/h)
- •Long dark winters (4h daylight in December)
- •Isolation during volcanic events possible
Notes
Iceland offers unique climate advantages: no heat, pure water, 100% renewable energy. Risks are different from elsewhere - volcanoes instead of heatwaves. Society is extremely well prepared. Vedur.is and SafeTravel.is are MUST-HAVE apps. For climate refugees from hot regions, Iceland is paradise - but winter darkness should not be underestimated (SAD common!).
Data sources
Scientific Disclaimer
Climate projections are based on models with inherent uncertainties. Actual outcomes may differ. We present mainstream scientific consensus (IPCC) but acknowledge uncertainty ranges. This is not financial advice. Consult climate scientists and experts for specific decisions.
Safety & Security
Safety & Crime in Iceland
Safety Indicators
Comparison with DACH Region
For comparison: Germany (CPI: 78), Austria (CPI: 71), Switzerland (CPI: 82)
Notes
One of the safest countries worldwide. Virtually no violent crime. Police normally do not carry weapons.
Visa & Immigration
Immigration Options for Iceland
Visa Options
EEA Freedom of Movement
EU/EEA citizens can enter, work and live without visa. Registration with Þjóðskrá (Registers Iceland) required after 3 months → Kennitala (ID number).
Work Permit (Non-EEA)
Non-EEA citizens need work permit BEFORE entry. Employer must advertise position. Specialist visas for shortage occupations easier.
Expert / Specialist Visa
For highly qualified specialists. No labor market test. Faster processing. Employer must demonstrate skills shortage.
Path to Permanent Residency
EEA CITIZENS: Full freedom of movement! After 3 months → registration for Kennitala. After 5 years → permanent residence. Citizenship after 7 years (4 years for spouses of Icelanders, 3 years for Nordic citizens). IMPORTANT: Icelandic language test (B1) required for citizenship. Small community (~380,000) = quick integration but also high social expectations.
Important Notice
Visa and immigration regulations change frequently. The information provided is for general informational purposes only. Please consult the official government website or an immigration attorney for current and accurate information.