G/SCM/N/343/ISL  
 
20 June 2019  
(19-4198) Page: 1/29 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1  
 OF THE GATT 1994 AND  ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COU NTERVAILING MEASURES  
 
ICELAND  
 The following communication, dated 21 May 2019, is being circulated at the request of the 
Delegation of Iceland.  
 
_______________  
 
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  TABLE OF CONTENTS  
2017  ................................ ................................ ................................ ................................  4 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ .......................  4 
2   SUPPORT FOR R&D AND TE CHNOLOGICAL INNOVATI ON ................................ ............  6 
2.1   Technical Development Fund  ................................ ................................ .........................  6 
2.2   Research Fund  ................................ ................................ ................................ ............  6 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ..........  7 
3   SUPPORT TO SMALL  AND MEDIUM -SIZED CO MPANIES ................................ ................  8 
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 93 -221))  ................................ ................................ ................................ ... 8 
3.2   Regional Development Fund  ................................ ................................ ..........................  9 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ..............................  9 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ..................  9 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ...................... 10 
4.3   Vocational  Rehabilitation  ................................ ................................ ............................. 10 
4.4   Employment of Handicapped Persons  ................................ ................................ ............ 11 
5   REGIONAL SUPPORT  ................................ ................................ ................................ . 12 
5.1   Assist ance to Employment Development Projects  ................................ ........................... 12 
5.2   Assistance to Local Economic Development  ................................ ................................ ....12 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ................  13 
7   RURAL TOURISM  ................................ ................................ ................................ ....... 14 
8   AID TO PROMO TE MARKETING OF ICEL ANDIC TOURISM  ................................ ...........  15 
9   SCHEME TO SUPPOR T INNOVATION COMPANI ES ................................ ......................  15 
10   RISK FINANCE AI D FOR SMES  ................................ ................................ .................  16 
2018  ................................ ................................ ................................ ..............................  17 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ .....................  17 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ ..........  19 
2.1   Technical Development Fund  ................................ ................................ ........................ 19 
2.2   Research Fund  ................................ ................................ ................................ ........... 19 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ......... 20 
3   SUPPORT TO SMALL  AND MEDIUM -SIZED CO MPANIES ................................ ..............  21 
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subs idies and export  
promotion (Case 93 -221))  ................................ ................................ ................................ ..21 
3.2   Regional Development Fund  ................................ ................................ ......................... 21 
4   SUPPORT FOR EMPL OYMENT AND TRAINING  ................................ ............................  22 
4.1   Vocational Training Fund Support for Vocational Training  ................................ ................. 22 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ...................... 23 
4.3   Vocational Rehabilitation  ................................ ................................ ............................. 23 
4.4   Employment of Handicapped Persons  ................................ ................................ ............ 24 
5   REGIONAL SUPPORT  ................................ ................................ ................................ . 24 
5.1   Assistance to Employment Development Projects  ................................ ........................... 24 G/SCM/N/343/ISL  
 
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  5.2   Assistance to Local Economic Development  ................................ ................................ ....25 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION IN ICEL AND ................  26 
7   RURAL TOURISM  ................................ ................................ ................................ ....... 27 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ...........  28 
9   SCHEME TO SUPPOR T INNOVATION COMPANI ES ................................ ......................  28 
10   RISK FINANCE AI D FOR SMES  ................................ ................................ .................  29 
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  2017  
1  THE AGRICULTURAL SEC TOR 
A. NAME OF PROGRAMME  
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms . (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
B. RESPONSIBLE AUTHORIT Y 
Ministry of Industries and Innovation . 
C. POLICY OBJECTIVE  
The main objective of the agreement is to strengthen Icelandic agriculture and provide the sector 
with the largest possible variety of opportunities for expansion. The aim of the agreement is to 
provide the agricultural sector with a framework co nducive to creating economic value and to making 
the most of opportunities present in the country 's rural areas, for the benefit of farmers, consumers 
and society at large. This development must be founded on specificity, sustainability and diversity. 
For that purpose, the agreement contains provisions on new projects designed to strengthen the 
operational basis of the agricultural sector and promote development and innovation.  
D. FORMS OF SUBSIDY  
Agricultural subsidies in Iceland is mostly provided through di rect payments, based on payment 
entitlements, which are directly or indirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations  for the Agricultural Agreements in 201 7 are made under items 04 -801, 04 -
805 and 04 -807 of the State budget (Ministry of Industries and Innovation).  
E. AMOUNT OF SUBSIDY  
Items making up the amount of support as measured by total costs in Government Accounts f or 
2018 are listed in Table 1.  
Table 1  Amount of support in 201 7 (Government Accounts); Million ISK  
 2017  
Agricultural Productivity Fund  134 
Directs payments to sheep farmers  2,531  
Quality control scheme; sheep farmers  1,731  
Wool utilization; subsidies  451 
Direct payments to dairy farmers  4,618  
Direct payments to horticulture farmers  341 
Electricity subsidies to horticulture farmers (greenhouse)  244 
 
F. RULES AND CONDITIONS  
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer 's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer 's Association on behalf of the Governmen t on the total support target for milk and total 
support target for sheep meat entitlements and direct payments for horticulture.  Administered prices 
are infused for milk.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse ). 
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  1.  Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies 
and on support entitlements. The annual quantity must be within the allocated supported 
targets. The amount of monetary support per litre is the same for all producers in Iceland. 
Additional payments for delivered milk are to be made monthly for all delivered milk, 
irrespective of support entitlements.  
2.  Sheep farmers  
Sheep farmers receive direct payments from the Government which are based on support 
targets for sheep me at entitlements, for which they must own 70% live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based on 
animal welfare, product quality and traceability, and sustainability criteria.  
3.  Sheep farmers; wool  
Sheep farmers receive support from the Government based on quantity and quality of wool 
produced.  
4.  Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial lighting receive direct payments  from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
The time of application of the agricultural agreements between the Government and the Farmer 's 
Association from  1st January 2017 until the end of 2026.  
 
H. LEGAL BASIS  
Act No. 99/1993 on Agricultural Produce. The State Budget.  
 
I. TRADE EFFECTS  
An assessment of the trade effects of the subsidies is not available. Below, in Tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
Table 2  Quantity of milk received by dairies and calculated exports by  
fat-content of milk  derived products (in 1,000 of litres) for 201 7 
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2017 145,114  2% 
Table 3  Sheep meat production and exports 201 7 (in 1,000 kg)  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2017 10,619  30% 
Table 4  Tomato, cucumber and bell pepper production and exports 201 7 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,334  1,857  191 <1% 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORIT Y 
The Icelandic Centre for Research ( Rannís ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF S TATE AID  
The amount of State aid in 201 7: ISK 2. 425 million.  
 
D. RULES AND CONDITIONS  
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will i n general operate as a competitive fund through which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation.  The Fund is intended to give support to spin -off ventur es 
and innovative firms to secure that economic benefits accrue to society from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technical Development Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consu ltation with the business community, research 
institutes and universities.  Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base  their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
The support is granted to a variety of sm all projects and sectors ; therefore , it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORIT Y 
The Icelandic Centre for Research ( Rannís ) which is under the supervision of the Ministry of Culture 
and Education.  
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  B. POLICY OBJECTIVES  
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  
 
C. AMOUNT AND FORM OF S TATE AID  
The amount of State aid in 201 7: ISK 2. 512 million.  
  
D. RULES AND CONDITIONS  
Subsidies are granted only on the basis of project applications.  The Funds grants are for f undamental 
research at Universities and the involvement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants bas ed on applications from scientists, business 
firms and institutions.  The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribute to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers grants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer review 
evaluation of research project quality, the  competence of the individuals involved and the facilities 
available for completing the project.  
 
E. LEGAL BASIS  
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
The support is granted to a variety of small proj ects and sectors ; therefore , it is difficult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
Research Fund has been operating since 2004. It took over from the Science Fund which expired in 
2004.  
 
2.3  Support for R&D in marin e aquaculture  
A. RESPONSIBLE AUTHORIT Y 
 Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 Grants.  
 
D. AMOUNT OF SUPPORT  
 2017: ISK 32.71  million . 
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of applications evaluated by a special committee.  
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  F. DURATION  
There is no time limit, but each programme is decided on for a year at a time.   
 
G. LEGAL BASIS  
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
There is no trade effect due to limited support.  
 
3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPAN IES 
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export 
promotion (Case 93 -221))  
A. RESPONSIBLE AUTHORIT Y 
Innovation Center  Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, produ ct development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants.  Support shall in general not cover more than 50% of eligible expenses.  
  
D. AMOUNT OF SUPPOR T 
2017: ISK 6 7 million.  
  
E. RULES AND CONDITIONS  
Firms and individuals having a registered domicile in Iceland can apply for a grant.  In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they hav e not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.   
 
F. DURATION  
There is no time limit, but each programme is decided on for a year at a time.   
 
G. LEGAL BASIS  
The Budget item no. 04-528-198. 
 
H. TRADE EFFECTS  
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
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  3.2  Regional Development Fund  
A. RESPONSIBLE AUTHORIT Y 
Innovation Center Iceland ( Nýsköpunarmiðstöð Íslands ) which is under the s upervision of the 
Ministry of Employment and Innovation.  
 
B. POLICY OBJECTIVE  
To promote cooperation between local governments, safeguard their interests, support industries 
and enhance quality of life in the entire region economically, socially and culturall y.  
 
C. FORM OF SUPPORT  
Grants.  
 
D. AMOUNT OF SUPPORT  
2017: ISK 190.5  million . 
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
There is no time limit.   
 
G. LEGAL BASIS  
Act No 69/2015 ( Lög um byggðaáætlun og sóknaráætlun ) and the Budget item  
no. 04-541-115. 
 
H. TRADE EFFECTS  
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund  Suppor t for Vocational Training  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Education and Culture.  
 
B. B. POLICY OBJECTIVE  
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
  
C. FORM OF STATE AID  
Grants.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 1. 465,8  million . 
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  E. RULES AND CONDITIONS  
Grants to organizations on application to the Vocational Training Fund mainly to make  curriculum or 
other teaching materials for the vocational training courses.  
 
F. DURATION  
The programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
Adult Education Act No. 27/2010 and the Budget item no. 02 -452.110, 02 -462.110, 02 -463.110 and 
02-461.110.  
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
  
B. POLICY OBJECTIVE  
The main purpose of this programme is to create new jobs among women.  Areas where high 
unemployment is among women will especially be considered.   
  
C. FORM OF STATE AID  
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production.  Institute of Regional Development pays the grants and controls 
their dispositio n. 
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 116.5  million . 
 
It is difficult to give exact information on how many jobs have been created or maintained as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
Grants to women on application to the Institute of Regional Development mainly to new product 
developing and marketing.  The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
The programme started  in 1990. Duration has not been specified.  
 
G. LEGAL BASIS  
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Welfare.  
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  B. POLICY OBJECTIVE  
The main purpose of this programme is to develop, integrate and monitor servic es in the field of 
vocational rehabilitation; aiming systematically for employment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 1 .140,5  million . 
 
E. RULES AND CONDITIONS  
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.   
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.   
 
F. LEGAL BASI S 
Act No. 60/2012  (lög um atvinnutengda starfsendurhæfingu og starfsemi  starfsendurhæfingasjóða ) 
and financed by the Budget item nos. 08 -856 and 08 -857. 
  
4.4   Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
The main purpose of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
Gross wage State aid to rehabilitatio n centres.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 8 4.4 million.  
 
E. RULES AND CONDITIONS  
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
No time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.121.  G/SCM/N/343/ISL  
 
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  5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORIT Y 
Institu te of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland.  The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 198.5  million.  
 
E. RULES AND CONDITIONS  
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
The programme has no time limit ; the amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item  
no. 04-542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORIT Y 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
The objective of the  programme is to assist local economic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
Grants to finance venturesome projects within the field of local employment  development and 
innovation.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 7: ISK 115.7  million.  
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  E. RULES AND CONDITIONS  
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down  by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance  
Authority.  
 
F. DURATION  
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item  
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATI ON 
The I nstitute of Regional Development is authorized according to Article 11 of Act No  106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act.  
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORIT Y 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimburse ment from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on  Income and Net Wealth Tax.  Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
Total expenditure (reimbursement of production cost) in 201 7: ISK 1. 167,2  million.  
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  E. RULES A ND CONDITIONS  
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
the production shall be suited for promoting Icelandic culture and the history and nature of Iceland;  
the production shall be suited for enhancing the experience, knowledge and artistic ambition of those 
involved in the production;  
a specific company shall be established in Iceland for the production; an Icelandic branch or a gency 
of a company registered in another EEA member state shall be considered a specific company;  
information on the principal parties involved in the film or television programme shall be submitted;  
information on domestic parties and their share in the production of the film or television programme  
shall be submitted;  
an itemized estimate of the production costs and sources of funding shall be submitted, together  
with confirmation by the funding parties and a declaration by the producer to the effect tha t the 
production conforms with the aims of the Act No. 43/1999;  
information on the content of the proposed film or television programme shall be submitted, 
including a manuscript, synopsis and information about filming locations;  
a production plan shall be  available (i.e. filming, post -production and marketing plan), providing for 
completion of the production within three years of receipt of the application for reimbursement;  
a statement shall be submitted to the effect that the material to be produced is i ntended for general 
distribution to cinemas or television stations, the content of the film or television programme shall 
not violate the Film Censorship and Prohibition of Violent Films Act, No.  47/1995, or Article 210 of 
the Criminal Code, No. 19/1940.  
F. DURATION  
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 04 -521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Transport a nd Communication.  
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 201 7: ISK 228 million.  G/SCM/N/343/ISL  
 
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  E. DURATION  
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
Budget item no. 14.10 . 
 
G. ADDITIONAL INFORMATI ON 
The EFTA Surveillance Authority is currently, following a complaint, examining State aid provided to 
promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamál astofa ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote marketing of Icelandic tourism.  Further  reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 201 7: ISK 55.4 million.  
  
E. DURATION  
The programme is intended to be temporary ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
Budget item no. 04 -559.1.44.  
 
9  SCHEME TO SUPPORT INNO VATION COMPANIES  
A. RESPONSIBLE AUTHORITY  
Ministry of Finance and Economic Affairs.  
 
B. B. POLICY OBJECTIVE  
The objective of the programme is to promote research and development work and to improve the 
competitive conditions of innovation companies by giving them the right to deduct tax for  the cost 
of innovation projects.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 201 7: ISK 3.104,39 million.  
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  E. DURATION  
Duration not limited.  
 
F. LEGAL BASIS  
Act No. 152/2009 on support for innovation enterprises.  
 
10  RISK FINANCE AID FOR  SMES  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Finance and Economic Affairs and Directorate of Internal Revenue ( Ríkisskattstjóri ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to improve Icelandic competitiveness companies as well as 
support for innovation and development.  
 
This scheme does not apply to investments in companies in real estate activities, activities consisting 
in the leasing of movable assets or real estate, holding and investment companies, certain regulated 
entities, s ales of services and expert advice, film production, building construction, hotels, hostels, 
restaurants, import/export of products which are developed by others and mining.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allo wed in 201 7: ISK 74.55  million.  
  
E. DURATION  
The programme started 30/06/2016 and is limited to end of year 2018.  
 
F. LEGAL BASIS  
Article 30(1), section B, of the Income Tax Act No 90/2003.  
 
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  2018 
1  THE AGRICULTURAL SEC TOR 
A. NAME OF THE PROGRAMM E 
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms (Budget 
items No: 04 -801, 04 -805 & 04 -807).  
 
B. RESPONSIBLE AUTHORIT Y 
Ministry of Industries and Innovation . 
 
C. POLICY OBJECTIVE  
The main objective of the agreement is to strengthen Iceland ic agriculture and provide the sector 
with the largest possible variety of opportunities for expansion. The aim of the agreement is to 
provide the agricultural sector with a framework conducive to creating economic value and to making 
the most of opportuni ties present in the country 's rural areas, for the benefit of farmers, consumers 
and society at large. This development must be founded on specificity, sustainability and diversity. 
For that purpose, the agreement contains provisions on new projects design ed to strengthen the 
operational basis of the agricultural sector and promote development and innovation.  
 
D. FORMS OF SUBSIDY  
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly or i ndirectly coupled with production factors. Direct payments are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2018 are made under items 04 -801, 04-805 
and 04 -807 of the State budget (Ministry of Industries and Innovation).  
 
E. AMOUNT OF SUBSIDY  
Items making up the amount of support as measured by total costs in Government Accounts for 
2018 are listed in Table 1.  
 
Table 1 Amount of support in 2018 (Government Accounts); Million ISK  
 2018  
Agricultural Productivity Fund  127 
Directs payments to sheep farmers  2,341  
Quality control scheme; sheep farmers  1,734  
Wool utilization; subsidies  451 
Direct payments to dairy farmers  4,702  
Direct payments to  horticulture farmers  281 
Electricity subsidies to horticulture farmers (greenhouse)  255 
 
F. RULES AND CONDITIONS  
Implementation of the agricultural policy revolves around Agricultural Agreements negotiated 
between the Government and the Farmer 's Association. Under Act No. 99/1993 on Agricultural 
Produce, the Minister of Fisheries and Agriculture is given the authority to negotiate with the 
Farmer 's Association on behalf of the Government on the total support target for milk and total 
support targe t for sheep meat entitlements and direct payments for horticulture. Administered prices 
are infused for milk.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
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  1. Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies 
and on support entitlements. The annual quantity must be within the allocated supported 
targets. The amount of monetary support per litre is the same for all producers in Iceland. 
Additional payments for delivere d milk are to be made monthly for all delivered milk, 
irrespective of support entitlements.  
2. Sheep farmers  
Sheep farmers receive direct payments from the Government which are based on support 
targets for sheep meat entitlements, for which they must own 70%  live sheep. Additional 
payments to sheep farmers are related to a quality control scheme for lamb meat, based 
on animal welfare, product quality and traceability, and sustainability criteria.  
3. Sheep farmers; wool  
Sheep farmers receive support from the Gove rnment based on quantity and quality of 
wool produced.  
4. Horticulture farmers  
Horticulture farmers producing cucumbers, peppers and tomatoes in greenhouses, mainly 
under artificial lighting receive direct payments from the government. The distribution of 
electricity used for artificial lighting is also subsidized to some extent by the Government.  
G. DURATION  
The time of application of the agricultural agreements between the Government and the Farmer 's 
Association from 1st January 2017 until the end of 2026.  
 
H. LEGAL BASIS  
Act No. 99/1993 on Agricultural Produce. The State Budget.  
 
I. TRADE EFFECTS  
An assessment of the trade effects of the subsidies is not available. Below, in Tables 2, 3 and 4 there 
are, however, presented statistics on production and exports of th e relevant agricultural 
commodities.  
Table 2 Quantity of milk received by dairies and calculated exports by  
fat-content of milk derived products (in 1,000 of litres) for 2018  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2018 144,779  5% 
Table 3 Sheep meat production and exports 201 7 (in 1,000 kg)  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2018 10,487  33% 
Table 4 Tomato, cucumber and bell pepper production and  exports 201 7 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,213  1,927  181 <1% 
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  2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORIT Y 
The Icelandic Centre for Research ( Rannís ) which is under the supervision of the Ministry of Industry 
and Innovation.  
 
B. POLICY OBJECTIVES  
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF S TATE AID  
The amount of State aid in 2018: ISK 2.520 million.  
 
D. RULES AND CONDITIONS  
The role of the fund is to support research and development activities, which aim towards innovation 
in Icelandic industry. The Fund will in general operate as a competitive fund through  which firms, 
research institutes and universities will have the possibility of financing projects that support 
technological development and innovation. The Fund is intended to give support to spin -off ventures 
and innovative firms to secure that economic  benefits accrue to society from the scientific and 
technical knowledge and the innovation arising from these new ventures.  
 
The Science and Technology Policy Council attaches high importance to close co -ordination between 
the Research Fund and the Technic al Development Fund, as well as co -operation with other public 
funds and venture investors. The Technical Development Fund can take the initiative to establish 
programmes and specific actions prepared in consultation with the business community, research 
institutes and universities. Finally, the Technical Development Fund is permitted to enter into 
partnerships with venture capital investors for seed and early risk financing toward establishing firms 
which base their operations on technological development and research and which involves a novelty 
to the economy.  
 
E. LEGAL BASIS  
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
The support is granted to a variety of small projects and sectors ; therefore , it is diff icult to present 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
The Technology Development Fund has been operating since 2004. It took over from the Technology 
Fund which expired in 2004.  
 
2.2  Research Fund  
A. RESPONSIBLE AUTHORIT Y 
The Ice landic Centre for Research ( Rannís ) which is under the supervision of the Ministry of Culture 
and Education.  
 
B. POLICY OBJECTIVES  
The objective of the Research Fund is to facilitate fundamental research at University institutes or 
other Governmental R&D institutes.  G/SCM/N/343/ISL  
 
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  C. AMOUNT AND FORM OF S TATE AID  
The amount of State aid in 2018: ISK 2.735 million.  
  
D. RULES AND CONDITIONS  
Subsidies are granted only on the basis of project applications. The Funds grants are for fundamental 
research at Universities and the invol vement of private companies is very limited or non -existent.  
 
The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community infrastructure through project grants based on applications from scientists, business 
firms and institutions. The Science and Technology Policy Council encourages the Fund to give young 
scientists an opportunity to establish their work and contribute to the further accumulation of 
scientific and technical knowledge.  
 
The Research Fund offers gr ants in accordance with the priorities set by the Science and Technology 
Policy Council and the grants strategy defined by the Science Board based on a peer review 
evaluation of research project quality, the competence of the individuals involved and the f acilities 
available for completing the project.  
 
E. LEGAL BASIS  
Act no. 3/2003 on Public Support for Scientific Research, with later amendments.  
 
F. TRADE EFFECTS  
The support is granted to a variety of small projects and sectors ; therefore , it is difficult to p resent 
statistical data permitting an assessment of trade effects.  
 
G. DURATION  
Research Fund has been operating since 2004. It took over from the Science Fund which expired in 
2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHORIT Y 
 Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
 To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
 Grants.  
 
D. AMOUNT OF SUPPORT  
 2018: 35.95 million ISK . 
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of  applications evaluated by a special committee.  
 
F. DURATION  
There is no time limit, but each programme is decided on for a year at a time.  
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  G. LEGAL BASIS  
Act no. 72/2008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
There is no trade effect due to limited support.  
 
3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPAN IES 
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export 
promotion (Case 93 -221))  
A. RESPONSIBLE AUTHORIT Y 
Innovation Center  Iceland which is under the supervision of the Ministry of Employment and 
Innovation.  
 
B. POLICY OBJECTIVE  
The objective is, to increase the knowledge and competence of entrepreneurs and small and 
medium -sized enterprises such as in managing, financing, produ ct development, marketing and 
innovation.  
 
C. FORM OF SUPPORT  
Cost items incurred for consultants, product development, marketing and innovation are eligible for 
grants. Support shall in general not cover more than 50% of eligible expenses.  
  
D. AMOUNT OF SUPPOR T 
2018: ISK 65.7 million.  
  
E. RULES AND CONDITIONS  
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the de minimis  rule, individuals who apply for grants according to these rules must declare that 
they h ave not received a grant from the Government amounts to more than 200,000 EURO last 3 
years, the grant applied for included.   
 
F. DURATION  
There is no time limit, but each programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
The Budget item no. 04 -528-198. 
 
H. TRADE EFFECTS  
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
3.2  Regional Development Fund  
A. RESPONSIBLE AUTHORIT Y 
Innovation Center Iceland ( Nýsköpunarmiðstöð Íslands ) which is under the supervision of the 
Ministry of Employment and Innovation.  
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  B. POLICY OBJECTIVE  
To promote cooperation between local governments, safeguard their interests, support industries 
and enhance quality of life in the entire region economically, socially and cultural ly.  
 
C. FORM OF SUPPORT  
Grants.  
 
D. AMOUNT OF SUPPORT  
2018: ISK 209.5 million . 
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
There is no time limit.  
 
G. LEGAL BASIS  
Act No 69/2015 ( Lög um byggðaáætlun og sóknaráætlun ) and the Budget item  
no. 04-541-115. 
 
H. TRADE EFFECTS  
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 
4  SUPPORT FOR EMPLOYME NT AND TRAINING  
4.1  Vocational Training Fund Support for Vocational Training  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
The main purpose of this programme is to maintain and develop vocational skills, in most cases for 
people already employed.  
  
C. FORM OF STATE AID  
Grant s. 
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 1.404,1 million . 
 
E. RULES AND CONDITIONS  
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training co urses.  
 
F. DURATION  
The programme started in 1992. Duration has not been specified.  
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  G. LEGAL BASIS  
Adult Education Act No. 27/2010 and the Budget item no. 02 -452.110, 02 -462.110, 02 -463.110 and 
02-461.110.  
 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
  
B. POLICY OBJECTIVE  
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women wil l especially be considered.  
  
C. FORM OF STATE AID  
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposit ion. 
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 44 million . 
 
It is difficult to give exact information on how many jobs have been created or maintained as many 
of these new jobs are just part time jobs.  
 
E. RULES AND CONDITIONS  
Grants to women  on application to the Institute of Regional Development mainly to new product 
developing and marketing. The grant can only be given to companies, which are at least 50% owned 
by women or have been established by women.  
 
F. DURATION  
The programme started in 1 990. Duration has not been specified.  
 
G. LEGAL BASIS  
Governmental decision from 1990.  
 
4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
The main purpose of this programme is to develop, integrate and monitor services in  the field of 
vocational rehabilitation; aiming systematically for employment of individuals following illness or 
injury.  
 
C. FORM OF STATE AID  
Gross wage State aid to rehabilitation centres.  
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  D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 1.149 mi llion. 
 
E. RULES AND CONDITIONS  
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
The new programme started in 1992. Duration has not been specified.  
 
G. LEGAL BASIS  
Act No. 60 /2012  (lög um atvinnutengda starfsendurhæfingu og starfsemi starfsendurhæfingasjóða ) 
and financed by the Budget item nos. 08 -856 and 08 -857. 
  
4.4   Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
The main purpose  of this programme is to ensure that disabled persons enjoy human rights and 
freedoms on the same basis as others and that they are guaranteed the support necessary to enjoy 
these rights.  
 
C. FORM OF STATE AID  
Gross wage State aid to rehabilitation centres.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 85 million.  
 
E. RULES AND CONDITIONS  
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
No time limit; the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.121.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORIT Y 
Institute of Regional Development ( Byggðastofnun ). 
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  B. POLICY OBJECTIVE  
The objective of the programme is to assist the economic development of the nationally assisted 
areas of Iceland. The assisted projects are small and cover employment development, training and 
innovation.  
 
C. FORM OF STATE AID  
Grants, as assistance to Employment Development Projects, which fall within the objectives of Act 
No. 106/1999, on the Institute of Regional Development.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 204.8 million.  
 
E. RULES AND CO NDITIONS  
The programme is available to individuals, private companies, local development companies and 
municipalities. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid  approved by the EFTA Surveillance 
Authority.  
 
F. DURATION  
The programme has no time limit ; the amount is decided on in the Budget each year.  
 
G. LEGAL BASIS  
Article 10 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no.  04-
542. 
 
5.2  Assistance to Local Economic Development  
A. RESPONSIBLE AUTHORIT Y 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to assist local economic development companies and to finance 
venturesome projects within  the field of local employment development and innovation.  
 
C. FORM OF STATE AID  
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2018: ISK 243.9 million.  
 
E. RULES AND CONDITIONS  
According to Act No. 106/1999, on the Institute of Regional Development, the assistance is to be in 
accordance with rules laid down by the Ministry of Employment and Innovation. These rules have 
not yet been issued. The subsidies are subject to the conditions laid down in the EFTA Surveillance 
Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA Surveillance 
Authority.  
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  F. DURATION  
The programme has no time limit ; the amounts are decided on in the Budget each ye ar. 
 
G. LEGAL BASIS  
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item no.  04-
542.1.10.  
 
H. ADDITIONAL INFORMATI ON 
The Institute of Regional Development is authorized according to Article 11 of Act No  106/1999 to 
provide loa ns and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELA ND 
A. RESPONSIBLE AUTHORIT Y 
Icelandic film centre ( Kvikmyndamiðstöð Íslands ) under the auspice of the Ministry of Industry.  
 
B. POLICY OBJECTIVE  
The objective of the Act is to enhance domestic culture and promote the history and nature of Iceland 
by temporarily supporting motion pictures and television programmes produced in Iceland.  
 
According to the Act authorisation is granted for the reimburse ment from the State Treasury of a 
proportion of the production costs incurred in the production of films and television programmes in 
Iceland.  
 
When more than 80% of the total production cost of a motion picture or television programme incurs 
in Iceland, the reimbursement shall be calculated from the total production cost incurring within the 
European Economic Area.  
 
Production costs refers to all costs incurred in Iceland deductible from the revenues of enterprises 
pursuant to the provisions of the Act on  Income and Net Wealth Tax. Payments pertaining to 
employees and contractors are only to be included in production costs if they are verifiable taxable 
in Iceland  
 
C. FORM OF STATE AID  
A specific company shall be established in Iceland for the production; an Icelandic branch or agency 
of a company registered in another Member State of the European Economic Area shall be considered 
a specific company  
 
D. AMOUNT OF STATE AID  
Total expenditure (reimbursement of production cost) in 2018: ISK 1.131,2 million.  
 
E. RULES A ND CONDITIONS  
In assessing whether a proportion of the production costs of a motion picture or a television 
programme shall be reimbursed, the following conditions shall be fulfilled:  
 
a. the production shall be suited for promoting Icelandic culture and the history and nature of 
Iceland;  
b. the production shall be suited for enhancing the experience, knowledge and artistic ambition 
of those involved in the production;  G/SCM/N/343/ISL  
 
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  c. a specific company shall be established in Iceland for the production; an Icelandic branch or 
agency of a company registered in another EEA member state shall be considered a specific 
company;  
d. information on the principal parties involved in the film or television programme shall be 
submitted;  
e. information on domestic parties and their share in the production of the film or television 
programme shall be submitted;  
f. an itemized estimate of the production costs and sources of funding shall be submitted, 
together with confirmation by the funding parties and a declaration by the producer to the 
effect that the production conforms with the aims of the Act No. 43/1999;  
g. information on the content of the proposed film or television programme shall be submitted, 
including a manuscript, synopsis and information about filming locations;  
h. a production plan shall  be available (i.e. filming, post -production and marketing plan), 
providing for completion of the production within three years of receipt of the application for 
reimbursement;  
i. a statement shall be submitted to the effect that the material to be produced i s intended for 
general distribution to cinemas or television stations, the content of the film or television 
programme shall not violate the Film Censorship and Prohibition of Violent Films Act, 
No. 47/1995, or Article 210 of the Criminal Code, No. 19/1940 . 
F. DURATION  
The programme is limited to end of year 2021.  
 
G. LEGAL BASIS  
Act on Temporary Reimbursements in Respect of Film Making in Iceland, No. 43/1999, with 
amendments. The Budget item no. 04 -521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Transpor t and Communication.  
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2018: ISK 175 million.  
 
E. DURATION  
The programme has no time limit ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
Budget item no. 04 -551. G/SCM/N/343/ISL  
 
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  G. ADDITIONAL INFORMATI ON 
The EFTA Surveillance Authority is currently, following  a complaint, examining State aid provided to 
promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamá lastofa ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote marketing of Icelandic tourism. Further reference is 
made to a correspondence with the Authority concerning Case No. 47859.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2018: ISK 55.4 million.  
  
E. DURATION  
The programme is intended to be temporary ; the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
Budget item no. 04 -559.1.44.  
 
9  SCHEME TO SUPPORT IN NOVATION COMPANIES  
A. RESPONSIBLE AUTHORITY  
Ministry of Finance and Economic Affairs.  
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote research and development work and to improve the 
competitive conditions of innovation companies by giving them the right to deduct tax for th e cost 
of innovation projects.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2018: ISK 3.3 00 million.  
  
E. DURATION  
Duration not limited.  
 
F. LEGAL BASIS  
Act No. 152/2009 on support for innovation enterprises.  
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  10  RISK FIN ANCE AID FOR SMES  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Finance and Economic Affairs and Directorate of Internal Revenue ( Ríkisskattstjóri ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to improve Icelandic competitiveness companies as well as 
support for innovation and development.  
This scheme does not apply to investments in companies in real estate activities, activities consisting 
in the leasing of movable assets or real estate, holding and investment companies, certain regulated 
entities, sales of services and expert advice, film production, building construction, hotels, hostels, 
restaurants, import/export of products which are developed by others and mining.  
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2018: ISK 999.856 million.  
  
E. DURATION  
The programme started 30/06/2016 and is limited to end of year 2018.  
 
F. LEGAL BASIS  
Article 30(1), section B, of the Income Tax Act No 90/2003.  
 
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