It is very important for you to have a tax card if you are going to work in Iceland. You can get a form for application RSK 14.04 at the website here. In order to have the right amount of tax deducted, you have to give your employer your tax card. The tax card entitles you to personal tax credit, kr. 46.532 pr. month in the year 2012. Without your tax card your employer has to deduct full tax, from the salary, without any tax credit. The same applies if you have other income such as pension, benefits etc.

To get a tax card your must have a personal identity number, residence permit, and be employed.

With the tax card you are entitled to a tax credit for the time you stay in Iceland, i.e. from the day you arrive and up to the day you leave the country.