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Suspected Contractor Tax Evasions Investigated

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Suspected Contractor Tax Evasions Investigated

Icelandic money

Photo: Geir Ólafsson.

The Directorate of Tax Investigations in Iceland is investigating 22 contractors, suspected of trying to evade tax payments by transferring the responsibility for their payments to their subcontractors, RÚV reports. The combined amount from the cases in question is ISK 2 billion (USD 18 million, EUR 17 million), according to Bryndís Kristjánsdóttir, director of tax investigations.

In her comments on a parliamentary resolution, suggesting legalizing a so-called chain of responsibility, she stated that her office’s experience has shown that contractors increasingly try to transfer the responsibility of tax payments to their subcontractors.

The parliamentary resolution suggests that a task force be set up to draft a bill which, if passed into law, would make contractors financially responsible for their subcontractors’ failure to pay public dues, contract-based salaries, payments related to salaries, insurance and other contractual payments.

In her comments, Bryndís stated that the contractors’ practice frequently involves a chain of subcontractors, where the responsibility for tax payments moves down the chain, resulting in no or limited tax payments. There are, she continued, many indications that this is now done with a stronger intent than previously, and that the amounts are substantial.

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