atvinnubifreiðaleyfi

Atvinnubifreiðaleyfi is a tax incentive implemented by the Icelandic government to support small businesses and encourage economic activity. The allowance provides eligible companies with a deduction from their taxable income, reducing the overall tax burden during the qualifying period. It is designed to promote entrepreneurship, foster business growth, and help businesses remain competitive in both domestic and international markets.

Eligibility for the allowance is determined by the size and nature of the enterprise, as well as its annual revenue. Generally, businesses classified as “mikra og meðalverkefni” (small and medium enterprises) that generate a limited amount of annual turnover qualify for the deduction. Applicants must also demonstrate that the business operates primarily within Iceland and meets all legal requirements for registration and compliance with tax regulations. The allowance is typically available for a specified number of months each year, and the amount deducted from the taxable base is calculated as a fixed percentage of the eligible expenses or revenue.

To apply for the atvinnubifreiðaleyfi, businesses must submit the appropriate form to the Skatturinn (The Tax Administration) along with supporting documentation that details their income, expenses, and legal status. Once approved, the deduction can be claimed in the tax return for the relevant fiscal year. The program is periodically reviewed by the Ministry of Finance and is subject to changes in policy, thresholds, and eligibility criteria.