On 11 June 2018, Iceland's parliament approved Bill No. 561, which includes measures regarding joint taxation for permanent establishments (PEs) and value added tax (VAT) registration for foreign suppliers. The main measures include:

• Amendment of the joint taxation rules of the Income Tax Act to allow permanent establishments in Iceland of limited liability and private limited companies in Member States of the EEA and EFTA and the Faroe Islands to be jointly taxed together with other group members in Iceland, subject to the standard joint taxation conditions, which include minimum 90% ownership, same accounting year, etc.;
• Amendment of the joint taxation rules in connection with the above to provide that losses of a PE may only be deducted by an Icelandic company if the losses cannot be claimed by a foreign company; and
• Amendment of the Value Added Tax Act to introduce an optional simplified VAT registration procedure for foreign residents or permanent establishments abroad that supply electronic, telecommunications, or broadcasting services to Iceland residents (implementing provisions will be issued separately).

The measures will be effective from 1 January 2019.