Iceland - Union signals hidden tax increase - December 31, 2025

The chairman of the Confederation of Labour (ASÍ) says that an average wage earner will end up paying tens of thousands of krónur more in taxes each year because personal tax credits and income tax brackets are not being raised sufficiently at the turn of the year. According to tax law, both the personal tax credit and income tax thresholds are adjusted at the beginning of each year. This year, the personal tax credit is set to rise by 5.53%, but ASÍ says this is inadequate, as wages have increased by 7.5%. The labour leader argues that such a limited adjustment effectively amounts to a tax hike.

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For more information, please contact Paul de Beer or Oana Ciuca, De Burcht (Scientific Bureau for the Dutch Trade Union Movement) p.t.debeer@uva.nl or the Head of communications at the ETUI, Mehmet Koksal mkoksal@etui.org. For previous full issues of the Collective bargaining newsletter please visit https://www.etui.org/Newsletters/Collective-bargaining-newsletter or consult the archive with all articles in our database at www.cbnarchive.eu. You may find further information on the ETUI at www.etui.org.