Skattrannsóknarstjóri Ríkisins

The SR was founded in 1993 with the goal of functioning as a specialized and autonomous intelligence agency focused specifically on the tax system. The director of the SR is appointed by, and responsible only to, the Minister of Finance. While the central SR office is located in Reykjavík, the office still investigates all alleged tax crimes in all of Iceland’s nine tax districts of Reykjavík, Akranes, Ísafjörður, Siglufjörður, Akureyri, Egilsstaðir, Hella, Vestmannaeyjar and Hafnarfjörður.[2] The SR operates under Icelandic regulation and law nos. 361/1995, 50/1988, 45/1987, 113/1990, 145/1994, 144/1990, and 37/1993.[1]

The main role of the SR is to investigate and inform on the infringement of Icelandic tax laws, and reduce tax evasion. The SR is tasked with three central objectives by the Ministry of Finance.[2]

1. Investigate all cases where there is a suspected presence of tax fraud.
2. To represent the state of Iceland in legal cases in which a penalty procedure is conducted through a closed administrative action by the State Internal Revenue Board.
3. The preparation of major cases for criminal proceedings, and for further investigation by both the National Commissioner of the Icelandic Police and the Directorate of Public Prosecutions.

There are two objectives of SR investigations:[3]

1. Conclusions of SR investigations must be a basis for tax assessment.
2. Conclusions of SR investigations must serve as a basis for possible criminal proceedings.

The SR is tasked with investigating violations of all Icelandic tax laws levied or enforced by the Directorate of Internal Revenue, and violations of the Accounting Act and Financial Statements Act. Any other activities fall outside the SR’ scope of authority. Once a tax investigation case has concluded, the SR decides whether or not criminal proceedings are initiated. If criminal proceedings are initiated, they may proceed in three manners. The taxpayer is fined an amount deemed necessary by the SR, the SR presents a payment claim before the State Internal Revenue Board, or the case is referred to the Icelandic Police.[2] Each year, the SR investigates ~100 tax fraud cases. Tax fraud in Iceland tends to be concentrated in the restaurant and food industries.[2]

When a district tax office finds an Icelandic taxpayer in breach of tax law after conducting their general tax control, the SR receives the case from the district tax office. Any case where there is a suspicion of possible tax fraud, it is required by law to be reported to the SR.[2] The SR can also receive cases from state tax collectors, and the police if technical expertise is needed in accounting or fraud cases.[2]

Since its inception, the SR has implemented major changes in how the Icelandic government combats tax crimes. Thanks to the SR’s efforts, approximately ISK 4 billion or ~$58 million USD has been collected as a direct result of SR’s proceedings over the “past several years”.[2]