Iceland on December 30, 2024, published Regulation no. 1664/2024, which introduces the OECD’s Model Reporting Rules for digital platforms (MRR), effective January 1, 2025.
Background
29 countries (and counting) have committed to introducing information reporting obligations on digital platforms by adopting the OECD’s MRR. In addition to the EU countries on the list (where Council Directive (EU) 2021/514 (DAC7) applies), other countries include Canada, Colombia, Costa Rica, Norway, and the United Kingdom (that have either adopted or announced measures to adopt the rules).
Iceland’s regulation includes the following measures:
Scope
- The scope is limited to platforms that facilitate the rental of real estate and movable property, and/or the sale of goods and personal services.
- Reporting platforms in scope are any platform operator to which at least one of the following applies:
- The platform operator is tax resident in the European Economic Area (EEA) or meets one of the following conditions:
- The platform operator is registered in accordance with the laws of a member state of the EEA.
- The platform operator has its head office, including its effective management, in the EEA.
- The platform operator has a permanent establishment in the EEA and is not a qualifying platform operator outside the area.
- A platform operator is neither tax resident nor incorporated or controlled in or from a member state of the EEA or has a permanent establishment there but carries out relevant activities for reportable sellers or carries out relevant activities relating to the letting of immovable property in the EEA, and the platform operator is not a qualifying platform operator outside the EEA (i.e., a platform operator required to report in another jurisdiction).
- Platform operators can be excluded from the reporting requirement if they have demonstrated to the authority in a member state of the EEA, to which they would otherwise submit a report, that the platform's business model is such that they do not have sellers to report on.
Registration
- Reporting platforms are required to register with the Icelandic tax authorities, except if they are already registered in one of the member states of the EEA.
Compliance
- The Act took effect on January 1, 2025, and applies to reporting obligations for the 2025 calendar year and onward.
- Covered platform operators must provide the required information related to the reportable seller and fees related to in-scope transactions no later than January 31 of the following year.
- Covered platform operators must implement the OECD MRR’s reportable seller due diligence requirements, including verification of reportable sellers’ information and jurisdiction of residence.
Penalties
- Non-compliance with the reporting requirement would be subject to daily fines and intentional or gross negligence could result in criminal liability.
For more information, contact a KPMG tax professional:
Philippe Stephanny | philippestephanny@kpmg.com
Kristinn Jónasson | kristinnjonasson@kpmg.is