Skip to content
ChatProjectCodes

ARTICLE 4

U.S. Income Tax Treaty — iceland tax treaty documents: iceland.pdf · 2026-10-03 edition · updated 2026-10-04 · United States

General Rules of Taxation

(1) A resident of one of the Contracting States may be taxed by the other Contracting State on any income from sources within that other Contracting State and only on such income, subject to any limitations set forth in this Convention. For this purpose, the rules set forth in Article 6 (Source of Income) shall be applied to determine the source of income.

(2) The provisions of this Convention shall not be construed to restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded:

(a) By the laws of one of the Contracting States in the determination of the tax imposed by that Contracting State, or

(b) By any other agreement between the Contracting States.

(3) Notwithstanding any provisions of this Convention except paragraph (4), a Contracting State may tax a citizen or resident of that Contracting State as if this Convention had not come into affect. The provisions of paragraph (3) shall not affect:

(a) The benefits conferred by a Contracting State under Articles 5 (Relief from Double Taxation), 7 (Nondiscrimination), 25 (Social Security Payments), 26 (Diplomatic and Consular Officers) and 28 (Mutual Agreement Procedure); and

(b) The benefits conferred by a Contracting State under Articles 21 (Teachers), 22 (Students and Trainees), and 23 (Governmental Functions), upon individuals who are neither citizens of, nor have immigrant status in, that Contracting State.

(5) The United States may impose its personal holding company tax and its accumulated earnings tax notwithstanding any provision of this Convention. However, an Icelandic corporation shall be exempt from the United States personal holding company tax in any taxable year if all of its stock is owned, directly or indirectly, by one or more individuals who are residents of Iceland (and not citizens of the United States) for that entire year. An Icelandic corporation shall be exempt from the United States accumulated earnings tax in any taxable year unless such corporation is engaged in trade or business in the United States through a permanent establishment at any time during such year.

(6) The competent authorities of the two Contracting States may each prescribe regulations necessary to carry out the provisions of this Convention.

Get a plain-English answer with a citation back to this text.

Ask AI about this code
Export this section
▸Contents — U.S. Income Tax Treaty — iceland tax treaty documents: iceland.pdf
U.S. Income Tax Treaty — iceland tax treaty documents: iceland.pdf

GoCodebook provides public access, search, citation, multilingual explanation, and practical interpretation of legally adopted building regulations. It is not a substitute for the official ICC or California code publications.