New Developments in the Application of the Interest Deduction Limitation in Iceland

A new interest deduction limitation rule was introduced in Iceland on 13 October 2016, which limits the deduction of interest expenses to 30% of EBITDA. This note focuses on legislative changes made in 2017 with regard to the rules, as well as the conclusion of the Directorate of Internal Revenue that only gross interest expenses should be considered in determining the interest deduction limitation.