Annual accounts in Iceland: who must file, the 31 August deadline and the 600.000 kr. fine

Kassify · 6 November 2026

Every public and private limited company (hf. and ehf.) files annual accounts with Skatturinn's annual accounts register (ársreikningaskrá) every year, including companies that had no activity at all. The deadline is one month after approval at the annual general meeting and no later than eight months after the financial year ends, which is 31 August for companies whose financial year is the calendar year.

A company that misses the deadline gets an administrative fine of 600.000 kr. The fine drops by 90% if the accounts are filed within 30 days of the decision to impose it, and six months after the deadline has passed the register demands that the company be wound up by the court.

Below are the size classes and what each one files, when an auditor has to be involved, the dates, the fine in krónur and the mistakes that cost the most.

Who must file annual accounts

Under the Annual Accounts Act no. 3/2006, these entities must file:

• Public and private limited companies (hf. and ehf.).
• Limited partnership companies, cooperatives and cooperative federations.
• Savings banks and registered branches of foreign companies.
• Self-governing foundations that run a business.
• Companies with securities listed on a regulated market in the EEA, an EFTA state or the Faroe Islands.

General and limited partnerships also file if all their partners are entities on this list, or if they are in the firm register and count as medium or large. A sole trader does not file with the register. Their business return, RSK 4.11, goes with their tax return. Anyone who is about to start an ehf. takes on the duty from the first financial year.

Standard annual accounts are one whole: income statement, balance sheet, cash flow statement where it applies, notes, the board's report and an auditor's opinion or an inspector's confirmation. With them goes a list of every shareholder in alphabetical order, with kennitala, shareholding and percentage at year end. The accounts are public, and electronic copies are free on Skatturinn's site.

The four size classes

What a company discloses depends on its size. A company belongs to a class if it does not exceed two of three limits on the balance sheet date. The class only changes if the company crosses the limits both in the year being closed and in the year before. A company with subsidiaries is classified by its group.

The requirements for notes and the board's report grow with size. Large companies also report on environmental, social and employee matters, human rights policy and the fight against corruption and bribery, under Article 66 d of the Act.

Hnappurinn for micro companies

A micro company may file an income statement and a balance sheet that Skatturinn builds from the company's tax return, instead of standard annual accounts. This is Hnappurinn, "the button". A Hnappurinn statement counts as full annual accounts under Article 3(7) of the Act, and about three in five companies that must file use it.

The tax return is filed first. Then you log in to Skatturinn's service site, choose Vefskil, Ársreikningaskrá, Skil ársreiknings, and ask Skatturinn to prepare the accounts. There you give the owners and managers, commitments outside the balance sheet such as pledges, loans and advances to owners and managers, and any purchase or sale of own shares. The statement is printed, approved at the annual general meeting and the signed copy kept, just like standard accounts.

Keep in mind: Hnappurinn is an option you have to use, not something that follows from the tax return. A company that only files its tax return has not filed annual accounts. Holding companies, investment companies, public-interest entities, companies under financial supervision, companies that depart from historical cost accounting and companies that must be audited cannot use it.

Auditor or inspector

Every company under the Act must be audited under Article 96(1). The exception is in Article 98(1): a company that stays under two of these three limits in each of the last two financial years does not need its accounts audited.

A company under the limits has an inspector (skoðunarmaður) or an auditor review and confirm its accounts. A micro company that uses Hnappurinn needs neither. The register rejects unaudited accounts from a company that must be audited and demands that they be audited.

The audit limits are far below the small company limits. A company with 450 m. kr. turnover and 210 m. kr. in assets two years running is a small company, and still has to be audited.

Deadlines and dates

The deadline is eight months after the financial year ends. It is 31 August only for companies on the calendar year. A financial year ending 30 June has until the end of February.

The company tax return, RSK 1.04, is a separate filing with Skatturinn. In 2026 the last day was 21 September for smaller companies filed by a bookkeeper or auditor, and 31 May for larger companies.

A bill amending the Annual Accounts Act, case 77 of the 158th session, is before Alþingi and covers size limits, audit limits and filing deadlines among other things. The figures on this page are the law in force on 6 November 2026.

The fine and how it drops

Once the deadline has passed, the register imposes an administrative fine of 600.000 kr. on the company under Article 120(1) and demands that it file. The fine drops if adequate annual accounts arrive in time. The time limits run from the date of the decision to impose the fine, not from the filing deadline.

The reduction takes effect at the end of each period, and the claim in your online bank drops then. A company that files early in a period can pay the lower amount straight away by bank transfer. The same 600.000 kr. fine applies when filed accounts do not meet the Act and no corrections arrive within 30 days, and it drops the same way.

A worked example in krónur

Assume an ehf. on the calendar year that has not filed its 2026 accounts when the deadline passes on 31 August 2027. Assume too that the register decides the fine on 15 September 2027. That date is an example, because the register sets it.

If the accounts are still missing at the end of February 2028, the register demands that the company be wound up. For comparison, Endurskoðun & ráðgjöf publishes a base fee of 130.000 kr. excluding VAT for a company's annual accounts and tax return. The full fine is more than four times that.

What happens after the fine

• The fine stands. An unpaid fine does not lapse when the accounts are filed later.
• Skatturinn publishes a list of companies in default on their annual accounts, for each financial year.
• If the accounts have not been filed six months after the deadline, the register demands that the company be wound up.
• Under Article 124 the company can be fined whether or not the breach can be traced to fault by a manager or an employee.

A fine can be lowered or cancelled if events beyond the company's control caused the delay and the accounts have been filed. The request, with reasons, goes to skatturinn@skatturinn.is. If the owners choose to wind up the company themselves, the fines can be cancelled, provided adequate accounts have been filed. A fine for inadequate accounts can be appealed to the Internal Revenue Board (yfirskattanefnd) within three months of being imposed.

How annual accounts are filed

1. 1
   Close the year's books

   Every transaction booked, the bank and suppliers reconciled and a receipt behind every entry. The accounts are never more correct than the books behind them.

2. 2
   Prepare the accounts

   Income statement, balance sheet, notes and the board's report, by size class. A micro company can use Hnappurinn once its tax return is filed.

3. 3
   Audit or review

   An auditor signs an opinion if the company is above the Article 98 limits. Otherwise an inspector or an auditor confirms the accounts.

4. 4
   The board signs, the AGM approves

   Preparing, filing and publishing the accounts is the responsibility of the board and the managing director. Their signature states that the accounts comply with the Act.

5. 5
   File electronically within a month

   On Skatturinn's service site, with the company's main web key or a professional's filing key. The register does not accept accounts on paper or by email.

6. 6
   Send them with the tax return

   A company that does not use Hnappurinn sends its signed accounts, with notes and breakdowns, with the RSK 1.04 tax return.

The mistakes that cost the most

• Thinking a dormant company is exempt. The duty to file applies whether the company was active or not, and little or no activity is not accepted as a reason to cancel a fine.
• Filing the tax return and assuming the accounts go with it. The filings are separate, and a micro company has to go back to the service site and choose Hnappurinn.
• Counting from the wrong day. Eight months means 31 August only on the calendar year, and the accounts are due no later than one month after the AGM.
• Trusting the bookkeeper to file. Mistakes by a bookkeeper, inspector or auditor, and misunderstandings between them and the company, are not accepted as reasons to cancel. The fine falls on the company.
• Filing unaudited accounts above the Article 98 limits. The register rejects them and demands an audit.
• Waiting for the fine to arrive. Accounts filed within 30 days of the decision cost 60.000 kr., and 600.000 kr. after three months.
• Forgetting the shareholder list. Names, kennitala and each shareholder's holding at year end go with the accounts.

Kassify files your annual accounts on time

Annual accounts come out of the year's books. If the books are behind, the accounts are late, and the fine falls on the company, not the bookkeeper.

Kassify is an accounting firm that uses AI. Every transaction is read, categorised and matched every month without a single manual entry, so the year-end close starts from the right numbers. Kassify prepares the accounts from the books, a chartered accountant reviews them, the board signs and Kassify files them with the register on time. The company's tax return is prepared alongside from the same numbers, so the work is not done twice.

• Bookkeeping, payroll, VAT returns and the app for a fixed monthly price, 20% below a traditional accounting firm.
• The annual accounts and tax return are included in the monthly price. You get the price in writing before you start.
• Kassify takes over mid-year, brings in the year's books and reconciles them, so the accounts cover the whole year. The move takes less than 7 days and is included in the price.
• Kassify talks to your bookkeeper and the history comes with you.
• If earlier years are unfiled, Kassify reviews where things stand and agrees a price for each year before the work starts.
• A bookkeeper replies within 24 hours. Kassify is designed and run with Gunnar Freyr Guðmundsson, chartered accountant and owner of Endár ehf.

More on annual accounts at Kassify. How the handover works is in the article on how to change bookkeeper, and what the whole year costs is in What bookkeeping costs.

Questions

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