|Population (2016)||332 529 (+0.01%)|
|EU Status||not a member, candidate since 2009|
|National Currency||ISK (Icelandic króna)|
|Nominal GDP (2015)||15.1 bln EUR (+0.15%)|
|Nominal GDP per Capita (2015)||45 500 EUR (+0.13%)|
|Real GDP Growth (2015)||4.0 % (2014: 1.9 %)|
|CPI, MoM (Sep 2016)||-1.5 % (Aug 2016: 0.0 %)|
|CPI, YoY (Sep 2016)||1.1 % (Aug 2016: 0.7 %)|
|CPI, Year Average (2015)||0.3 % (2014: 1.0 %)|
|Unemployment Rate (2015)||4.0 % (2014: 5.0 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||BBB+||good credit quality, outlook stable|
|Moody's||A3||upper medium grade, outlook stable|
|S&P||BBB+||lower medium grade|
|Double Taxation Agreements||36 signed agreements|
|Exchange on Request||48 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 26 May 2015, Model 1|
|Financial Market Development||4.2 (max 7.0)||rank: 53rd out of 138 countries|
|Banks' Soundness||4.7 (max 7.0)||rank: 74th out of 138 countries|
|Banking Industry Country Risk||7||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||1 700 000 ISK|
|Country Ceiling for Deposits|
|Local Currency (Icelandic króna)||A1||upper medium grade|
|Foreign Currency||A3||upper medium grade|
|Banking Sector Structure|
|Number of Banks||9|
|Recent Changes (2015)||new banks: 1, closed banks: 4|
|List of Banks in Iceland|
According to Eurostat, nominal GDP of Iceland in 2015 was 15.1 bln EUR.
Iceland outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.3% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 4.0% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Iceland was 45 500 EUR.
Iceland has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 20.3% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Iceland in 2015 expressed as annual percentages of average consumer prices was 0.3% which was above the Euro Area average (0.0%) and above the European Union average (0.0%). Inflation rates in 2016 - 2021 are IMF's estimates.
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Iceland signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Iceland and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Iceland signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Iceland and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Iceland signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Iceland has FATCA agreement with the U.S. in effect since 26 May 2015 (Intergovernmental Agreement Model 1). Financial institutions operating in Iceland are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Icelandic financial accounts hold in U.S. financial institutions will be reported to Icelandic authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Iceland is scored 4.2 out of maximum 7.0 and ranked 53rd out of 138 analysed economies. Soundness of banks is scored 4.7 bringing Iceland into the 74th place, trustworthiness and confidence of financial market is scored 4.3 (68th place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Iceland is included into group '7' with economic risk scored '7' and industry risk scored '7'.
|Economic imbalances||very high|
|Credit risk in economy||high|
|Systemwide funding||very high|
|Government support assessment||uncertain|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Iceland are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Iceland, branches of non-EEA banks, branches of Icelandic banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Covered Accounts||any credit balance resulting from financial deposits or transfers in normal banking transactions|
|Maximum Protected Amount||1 700 000 ISK|
|Paid In Currency||ISK|
Table 2. Deposit guarantee scheme in Iceland.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Icelandic króna) deposit ceiling for Iceland is set to A1 (upper medium grade), foreign currency deposit ceiling is A3 (upper medium grade).
Currently there are 9 credit institutions operating in Iceland.
Recent structural changes (2013 - 2015) of the banking sector of Iceland are summarised in Table 3.
|Number of Opened Banks||0||0||1|
|Number of Closed Banks||1||1||4|
Table 3. Recent structural changes in the banking sector of Iceland.
All the credit institutions operating in Iceland can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
The list of the most recently opened banks in Iceland is provided in Table 5.
|Sparisjóður Austurlands hf (new)||January 2015|
Table 5. The most recently opened banks in Iceland.