Former PM Confirms Tax Returns Not In Keeping With The Law

Former Prime Minister Sigmundur Davíð Gunnlaugsson has made statements about his tax returns that are not confirmed by what the law actually says.

In a post he made on his personal site, Sigmundur makes public a great deal of information about his tax reporting to Icelandic authorities. Public demand for Sigmundur to make his financial details public followed in the wake of the Panama Papers leak, in which Sigmundur was the first Icelander to be publicly implicated.

One of the stand-out contentions of his blog post is the following:

“The tax returns were based on the fact that the main operations of Wintris Inc. did not involve commercial operations but stockholding, bank management, and income from stocks. For this reason, a so-called CFC return was not submitted, as they are intended for holdings in commercial businesses in low-tax states.”

However, Kvennablaðið reports that these contentions do not hold up to scrutiny where Icelandic tax laws are concerned.

Being granted an exception from submitting a CFC return if the business in question is not commercial cannot be found in Icelandic law. Sigmundur has previously contended that CFC laws in Iceland only apply to management companies, and that Wintris was a holding company and therefore exempt from them, but it has been pointed out that this is also not true.

Furthermore, the Directorate of Internal Revenue (RSK) provides CFC returns, and no exceptions are listed regarding whether a person’s offshore company is a management company or holding company. A tax expert who spoke with Kvenneablaðið also confirmed that no exceptions of the kind Sigmundur is talking about can be found in Icelandic law.