The reimbursement comes from the state treasury, and a committee appointed by the culture and finance ministers decides applications. The Act states its aim as strengthening Icelandic culture and promoting the country's history and nature, and each project has to pass a cultural and production test set by regulation. Film in Iceland, part of Business Iceland, markets the scheme. The Icelandic Film Centre takes the applications.
Three rates, three routes
| Route | Rate | Conditions |
|---|---|---|
| Standard | 25% | Any eligible feature, series, or documentary with costs in Iceland |
| Large production | 35% | ISK 350 million of costs in Iceland, 30 working days in Iceland with at least 10 shooting days, at least 50 people working at least 50 days with pay taxed in Iceland |
| Children's and youth content | 35% | Features, animation, or documentaries made specifically for audiences 18 and under |
Film in Iceland's FAQ says the children's and youth rate has applied since December 2025.
Then there's the 80% rule. If more than 80% of a project's total cost is incurred in Iceland, the reimbursement base becomes all qualifying costs in the EEA, Greenland, and the Faroe Islands. A production that does almost everything in Iceland and finishes sound in Denmark can claim on the Danish mix too.
Worked example: $1,000,000 at 25%
Using ECB reference rates for 11 September 2026 (EUR 1 = USD 1.1592 and EUR 1 = ISK 139.60, so USD 1 = about ISK 120.43), $1,000,000 is about ISK 120,400,000.
A small feature spends ISK 72,000,000 in Iceland: local crew paid through Icelandic payroll, vehicle and gear rentals, accommodation in Vík, and a Reykjavík grade. The director's fee is paid to a US loan-out company that isn't taxed in Iceland, so it stays out.
- Reimbursement: ISK 72,000,000 x 25% = ISK 18,000,000 (about $149,500)
- 80% test: ISK 72,000,000 / ISK 120,400,000 = 60%, under 80%, so only Icelandic costs count
- Auditor's attestation required, because the reimbursement is over ISK 3 million
Worked example: $5,000,000 at 35%
$5,000,000 is about ISK 602,100,000. The production spends ISK 380,000,000 in Iceland over 34 working days, 12 of them shooting, with 55 people on Icelandic payroll for 50 or more days each.
- ISK 350 million test: passed (ISK 380 million)
- Days test: 34 working days with 12 shooting days, passed
- Crew test: 55 people for 50+ days, passed
- Reimbursement: ISK 380,000,000 x 35% = ISK 133,000,000 (about $1,104,000)
Drop to 9 shooting days or 48 crew members and the whole claim falls back to 25%: ISK 95,000,000. That ISK 38 million difference is worth building into the shooting schedule and crew plan from the start.
From application to payment
- Before production begins in Iceland, apply online with a statement of how the project meets the Act's aims, company registration papers, a production plan, itemized budget and financing with confirmations, planned distribution, a synopsis or script, shooting locations, and the main and Icelandic participants.
- The committee reviews the project against the cultural and production criteria and issues approval, which Film in Iceland describes as a letter of intent.
- Start main production within a year of approval. One extension is possible.
- Keep the project's books separate from every other project.
- Complete the production within three years of approval (up to five in special circumstances).
- Request payment within six months of the premiere (for a series, the premiere of the last episode). Reimbursements over ISK 3 million need an auditor's attestation.
Watch-outs
- Reimbursements expected to exceed ISK 300 million won't be paid earlier than 18 months after the application. Budget interest if you're borrowing against a big one.
- Public grants for the same project are deducted from Icelandic costs, and total public support plus reimbursement is capped at 85% of total cost.
- Commercials, music videos, shorts, news, and sports or entertainment recordings are excluded.
- Film in Iceland recommends using an Icelandic production service company; it's not a legal requirement in the Act.
- The Act lapses on 31 December 2028 unless extended again.
Nearby options
Norway pays up to 25% but sets high minimum budgets and requires 30% international financing. Ireland is the other North Atlantic option with a larger crew base. For how a straight reimbursement stacks up against a credit, see film rebates vs tax credits, and the cash rebate entry covers the basics.