The IRD handles tax issues for domestic and foreign parties. It is in charge of the co-ordination of tax measures between the nine districts, it is the head of tax control in the country and acts as an advisor to the government authorities in tax matters. It implements advisory services for the public on tax related matters and manages the operation of computer systems that links the tax authorities.
The administration of customs and internal revenues for which the Ministry of Finance is responsible, falls according to the new organisation within the functions of the same bureau of the Ministry of Finance, which is the Bureau of Revenue and Legal Affairs. The functions of this bureau are subdivided into three departments: the Department for Customs and Expenditure, the Department for Taxes and the Department for Revenue Control. Under the Department for Taxes fall the levy of state income and property taxes, capital gains tax, payroll tax, stamp duty, supplementary charges for the State Treasury and other state charges. Under the Department for Revenue Control falls the collection of duties, taxes and other state charges.
The tax system in Iceland is as follows:
- The state tax system, which covers state income and property taxes and various consumers’ taxes.
- The state customs system, which covers the collection of duties and customs control.
- The municipal tax system, which covers municipal income tax and other municipal taxes. The administration of the municipal tax system falls partly within the jurisdiction of the Ministry of Social Affairs.