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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Iceland: Dividends

Icelandic tax deducted from dividends at the agreement rate of 15 per cent (or 5 per cent if the shareholder is a company which owns at least 10 per cent of the capital of the company paying the dividends) qualifies for credit as a direct tax (see INTM164010(c)).

The reduction to the above rates is not given if the dividend is effectively connected with (see INTM153110 fifth sub-paragraph) a permanent establishment or fixed base which the United Kingdom resident recipient has in Iceland.

Where a dividend is paid to a United Kingdom company which controls, directly or indirectly, at least 10 per cent of the voting power in the Icelandic company paying the dividend, credit is also due for the underlying tax (Article 22(1)(b) and see INTM164010(d)).