Huge international aluminum companies pay no tax in Iceland

Two large aluminium companies, Alcoa and Norðurál, that have been operating in Iceland for years, have paid close to no corporate tax (sometimes referred to as income tax) over the past years. Alcoa for example has not paid a cent (or Icelandic króna) in corporate tax since the company was founded in 2003.

However, the government has been criticized through the years for supposedly selling the electricity very cheap (suspiciously cheap even). The price that the aluminum companies pay for the electricity was even a top secret for many years, but that secrecy has thankfully stopped. It has also been proven that Icelanders are not as interested in taking the new jobs in the aluminium factories as everyone had hoped. Many of the factory workers are actually imported foreigners.

According to recent news, the two biggest aluminum companies have paid close to no corporate tax since they started operating. Alcoa was founded in 2003 and has therefore been operating for 10 years. They haven't paid any corporate tax since then. Norðurál, that runs the aluminium factory in Grundartangi, has paid corporate tax for 3 of the 16 years that they have operated here.

Alcoa and Norðurál are international companies that run their business in Iceland. Their revenue and profits are made in Iceland. Their ownership is however complicated and goes through sister companies in Luxemburg (Alcoa) and Delaware USA (Norðurál) and from the sister companies to the mother companies.

The Icelandic companies are financed through their sister companies and owe them hundreds of billions of ISK and pay hundreds of millions of ISK in interests of those loans. That (high) cost is then deducted from the profit they make in Iceland, causing the companies to pay no corporate tax at all.