IS · Europe ↔ LU · Europe
Iceland vs Luxembourg: tax rates compared
Between the two, Iceland's income tax rate (46.3%) tops Luxembourg's (45.8%) by 0.5pp. The 37-country average is 43.2%: both sit above it.
Verified data covers four of the six tracked tax types for both countries; every rate below is cited to its source and dated.
Income Tax
| Country | Rate | Source |
|---|---|---|
| Iceland | 46.3% | Source: OECD Tax Database — Top statutory personal income tax rates · as of 2025-01-01 |
| Luxembourg | 45.8% | Source: OECD Tax Database — Top statutory personal income tax rates · as of 2025-01-01 |
| Difference | +0.5 pp | Iceland higher |
Corporate Tax
| Country | Rate | Source |
|---|---|---|
| Iceland | 20% | Source: Tax Foundation — Worldwide Corporate Tax Rates · as of 2025-01-01 |
| Luxembourg | 23.9% | Source: Tax Foundation — Worldwide Corporate Tax Rates · as of 2025-01-01 |
| Difference | −3.9 pp | Luxembourg higher |
Between the two, Luxembourg's corporate tax rate (23.9%) tops Iceland's (20%) by 3.9pp. The 201-country average is 22.6%: Iceland sits below it, Luxembourg sits above it.
VAT
| Country | Rate | Source |
|---|---|---|
| Iceland | 24% | Source: PWC Worldwide Tax Summaries — Iceland (Corporate, Other taxes) · as of 2026-06-22 |
| Luxembourg | 17% | Source: PWC Worldwide Tax Summaries — Luxembourg (Corporate, Other taxes) · as of 2026-01-13 |
| Difference | +7 pp | Iceland higherlargest gap on this page |
Between the two, Iceland's VAT rate (24%) tops Luxembourg's (17%) by 7pp. The 37-country average is 19.5%: Iceland sits above it, Luxembourg sits below it.
Wealth Tax
| Country | Rate | Source |
|---|---|---|
| Iceland | 0% | Source: PWC Worldwide Tax Summaries — Iceland (Individual, Other taxes) · as of 2026-06-22 |
| Luxembourg | 0% | Source: PWC Worldwide Tax Summaries — Luxembourg (Individual, Other taxes) · as of 2026-01-13 |
| Difference | 0 pp | displayed rates match |
There's no gap here — Iceland and Luxembourg both post a wealth tax rate of 0%. The 193-country average is 0.1%: both sit below it.
Not covered for both countries yet: Capital Gains Tax, Crypto Tax.