The legal system of Iceland
A Nordic civil-law system whose parliament, the Althingi, traces its origins to 930 AD. Iceland is not an EU member but is bound by most single-market law through the EEA Agreement.
Legal tradition
Iceland belongs to the civil law (nordic) tradition. A Nordic civil-law system whose parliament, the Althingi, traces its origins to 930 AD. Iceland is not an EU member but is bound by most single-market law through the EEA Agreement.
How power is divided
Parliamentary government with a directly elected President who holds a suspensive veto that can trigger a referendum, and an independent three-tier judiciary.
Where law comes from
- Constitution
- The 1944 constitution as amended.
- EEA law
- Single-market rules incorporated through the EEA Agreement.
- Acts of the Althingi
- Primary legislation.
- Regulations
- Issued by ministers under statutory authority.
The legal profession
Lawyers qualify through a law degree and practical requirements; rights of audience are tiered from district court up to the Supreme Court.
Law by topic in Iceland
- Employment & LabourNear-universal unionisation and collective agreements with legal effectIceland has among the world's highest union-membership rates, and collective agreements set binding minimum terms that apply across each sector as a statutory floor.
- Tax LawWorldwide income, combined state and municipal tax, and 24% VATResidents are taxed on worldwide income through a state and municipal system administered by Iceland Revenue and Customs. Standard VAT is 24%, with a reduced 11% rate for some goods and services.
- Civil ProcedureThe Civil Procedure Act and a three-tier court system since 2018Civil disputes begin in the District Courts under the Civil Procedure Act. Since 2018 an intermediate Court of Appeal (Landsréttur) sits below the Supreme Court, which now hears cases by leave.
- Constitutional LawThe 1944 Constitution and an Althingi rooted in 930 ADIceland is a parliamentary republic under the 1944 Constitution, with a directly elected President holding a referendum-triggering veto. The Althingi is among the world's oldest parliaments.
- Human RightsThe ECHR incorporated in 1994 and a modern rights chapterIceland incorporated the ECHR in 1994 and modernised the Constitution's human-rights chapter in 1995. The Althingi Ombudsman oversees the fairness of public administration.
- Business & CorporateThe einkahlutafélag (ehf) registered at the tax authorityThe private limited company (ehf) is the standard vehicle, requiring ISK 500,000 in capital and registered with the Register of Enterprises at Iceland Revenue and Customs.
- Immigration & NationalityEEA free movement and the Act on Foreigners via the Directorate of ImmigrationAs an EEA and Schengen member, Iceland grants free movement to EEA/EFTA nationals. Other foreigners need a residence permit under the Act on Foreigners, administered by the Directorate of Immigration.
- Property & LandRegistration at the district commissioner with limits on foreign ownershipReal-estate transfers are registered with the district commissioner (sýslumaður). Ownership of land by non-EEA nationals is restricted and generally requires ministerial permission.
- Family LawA single gender-neutral marriage law since 2010Iceland was among the first states to adopt one gender-neutral marriage law, in 2010. Divorce and most family matters are handled by the district commissioners.
- Criminal LawThe 1940 General Penal Code with prosecution led by the DPPCriminal law is based on the General Penal Code of 1940. Prosecutions are directed by the Director of Public Prosecutions, and serious cases are tried in the District Courts with possible appeal to Landsréttur.
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