Income tax in Iceland lower than OECD average

“Taxes on labour income for the average worker across the OECD remained stable at 35.9% in 2015,” reads a summary of the new Taxing Wages 2016 report on the OECD website. This figure refers to the total tax burden paid by a single person with no children working full-time on the average wage of the country in questions. Iceland has just the 22 nd highest tax rate of the 34 OECD countries studied. The study also measures the ‘tax wedge’ defined as total taxes paid by employees and employers, minus family benefits received as a percentage of the total labour costs of the employer. The tax wedge ranges from 7% in Chile to over 55% in Belgium. Iceland has considerably lower income tax than its Nordic counterparts – Denmark (36.4%), Finland (43.9%), Norway 36.6%), Sweden (42.7%), but a higher rate than both the United Kingdom (30.8%) and the United States (31.7%). (



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