Q: How a company in Iceland can send my salary in Estonia?

When working remotely for a corporation in Iceland , you salary can be send to Estonia but it is not tax free. An employee in Iceland is subject to a different tax system than the one in the country where the employee is working. The Icelandic tax system has a flat tax rate of 21% and the tax is paid on the income of the employee. The tax on the income of the employee is based on the place of residence. The tax rate on the income of the employee is equal to the rate that is set by the government of the country where the employee is working. When the employer is located in a country with a lower tax rate than the country where the employee is working, the employer is allowed to deduct the tax from the income of the employee. The tax deducted from the income of the employee is called a tax credit. When the employer is located in a country with a higher tax rate than the country where the employee is working, the employer is not allowed to deduct the tax from the income of the employee. The tax on the income of the employee is paid by the employee.

Question 1

Can I work remotely for a company in Iceland while being in Estonia?

Accepted Answer

It is usually doable, but we recommand to check the following key points first:

Do you have a work permit in Iceland?
Do you have a work permit in Estonia?
Is the company registered in Estonia?
Is the company registered in Iceland?
Do you have a bank account in Iceland?

Question 2

How to live in Estonia and find remote work in Iceland?

Accepted Answer

Finding remote work in Iceland if you are located in Estonia might be difficult, therefore we recommend you to check out the list of remote work companies in Iceland.

Estonia is a small country with a population of 1.3 million. However, it is considered to be the most innovative and entrepreneurial country in the world. It has a strong technology sector and many of the companies are international.
The benefits of working remotely include:
High productivity. Remote workers are more productive than those who work in an office.
Freedom. Remote workers have more flexibility and can work from anywhere in the world.
Achievement. Remote workers can be more focused and work on one project at a time.
Creativity. Remote workers are more creative and innovative.
Cost saving. Remote workers can save money on office space and other office-related expenses.
Cost saving.

Question 3

How a company in Iceland can send my salary in Estonia?

Accepted Answer

When working remotely for a corporation in Iceland, you salary can be send to Estonia but it is not tax free.

An employee in Iceland is subject to a different tax system than the one in the country where the employee is working. The Icelandic tax system has a flat tax rate of 21% and the tax is paid on the income of the employee.
The tax on the income of the employee is based on the place of residence. The tax rate on the income of the employee is equal to the rate that is set by the government of the country where the employee is working.
When the employer is located in a country with a lower tax rate than the country where the employee is working, the employer is allowed to deduct the tax from the income of the employee. The tax deducted from the income of the employee is called a tax credit.
When the employer is located in a country with a higher tax rate than the country where the employee is working, the employer is not allowed to deduct the tax from the income of the employee. The tax on the income of the employee is paid by the employee.

Question 4

Where to pay my taxes when working remotely in Estonia for a company in Iceland?

Accepted Answer

If you are working remotely in Estonia for a corporation established in Iceland, taxes could seem complicated but in fact it is not so difficult. The first thing you need to know is that in this case you are actually working for an Estonian company and not for the company in Iceland.

When you work for an Estonian company you are considered an Estonian citizen and you are taxed on the Estonian income tax. The company in Iceland has to file a tax return to the tax office in Iceland and it is the tax office that issues the tax report. The company in Iceland will pay the taxes to the tax office in Iceland and then send the report to the tax office in Estonia.
When you work for an Estonian company you can work in Estonia and still pay taxes to the Estonian tax office. When you work for a company in Iceland you can work in Iceland and still pay taxes to the tax office in Iceland. However, if you work for a company in Iceland you can also work in Estonia. The company in Iceland can send you to Estonia and you can work there. If you work for an Estonian company you can work in Estonia and still pay taxes to the Estonian tax office.