Taxes in Iceland are levied by the state and the municipalities. Property rights are strong and Iceland is one of the few countries where they are applied to fishery management. Taxpayers pay various subsidies to each other, similar to European countries with welfare state

Welfare state

A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...

, but the spending is less than in most European countries. Despite low tax rates, overall taxation and consumption is still much higher than countries such as Ireland

Ireland

Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...

. Employment regulations are relatively flexible.

Income tax

Income tax is deducted at source, known as pay-as-you-earn (PAYE). Each employee has a personal tax credit of 44,205 ISK per month; unused credit may be transferred to one's spouse. Up to 8% of gross income may be deducted for private pension insurance.

Monthly consideration	Rate
First 200,000 ISK	37.22%
Next 450,000 ISK	40.12%
Balance	46.12%