Corporate tax from the Icelandic Aluminum Industry

In 2011 the Aluminum Industry in Iceland carried almost 14 % of the tax base for corporate tax from all icelandic firms according to data from the Icelandic authorities. This is a relatively large number when this particular industry only represents 6,6 % of the total turnover from icelandic firms, and only totalling 0,01 % of the number of firms in Iceland. In other words the Aluminum Industry provides a relatively larger tax base for corporate taxes than the average Icelandic firm when looking at tax base in relation to turnover.

The size of the tax base from the aluminum industry rose substantially from 2009 to 2011 compared to other sectors as shown above. The amount rose from 9bn. Icelandinc Kroners in 2009 to 23bn. Icelandic Kroners in 2011. At the same time the tax base from the construction sector experiences a substantial decrease, which can be tied to the financial crisis. However with aluminum smelters in Iceland producing throughout the crisis there is an increase in the tax base in actual numbers and especially in relative numbers compared with other sectors experiencing a downturn.

What is the tax base?

The tax base is the income and/or value that the authorities use to claim corporate tax. The actual amount for each individual firm can be different, just as there can be different taxes. To compare across companies the tax base is thus applied rather than the amount of tax being paid. This makes it easier to compare the numbers. Here we see the Aluminum Industry having a rather large tax base that the authorities use to claim corporate tax from, which they must pay in Iceland.

Added to this are personal income taxes and social taxes, property value taxes etc. The impact of an industry with a substantial number of employees and a large tax base for corporate taxes must therefore be considered as a substantial contribution to the national economy.

You can find information on Icelandic taxes at the Icelandic Revenue Service and the Ministry of Finance. The numbers used here can be found in a publication from the Revenue Service (in Icelandic) – see data on pages 42-43:

http://rsk.is/ws/cm/file/t%C3%ADund_2011_12.is.pdf

Icelandic Ministry of Finance: http://eng.fjarmalaraduneyti.is/

Icelandic Revenue Service: http://www.rsk.is/