G/SCM/N/372/ISL  
16 September  2021 
(21-6907) Page: 1/30 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1  
OF THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES  
 
ICELAND  
The following communication, dated and received on 15 September  2021, is being circulated at the 
request of the delegation of Iceland.  
 
_______________  
 
  G/SCM/N/372/ISL  
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  Table of contents  
2019  ................................ ................................ ................................ ................................  4 
1  THE AGRICULTURAL SECTOR  ................................ ................................ ........................  4 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVATION  ................................ .............  6 
2.1  Technical Development Fund  ................................ ................................ ..........................  6 
2.2  Research Fund  ................................ ................................ ................................ .............  7 
2.3  Support for R&D in marine aquaculture  ................................ ................................ ...........  7 
3  SUPPORT TO SMALL AND MEDIUM -SIZED COMPANIES  ................................ ................  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 EMPLOYMENT 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  ................................ ................................ .............................. 11 
4.4  Employment of Handicapped Persons  ................................ ................................ ............. 11 
5  REGIONAL SUPPORT  ................................ ................................ ................................ .. 12 
5.1  Assistance to Employment Development Projects  ................................ ............................ 12 
5.2  Assistance to Local Economic Development  ................................ ................................ .....12 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PRODUCTION IN ICELAND  .................  13 
7  RURAL TOURISM  ................................ ................................ ................................ ........  15 
8  AID TO PROMOTE MARKETING OF ICELANDIC TOURISM  ................................ ............  15 
9  SCHEME TO SUPPORT INNOVATION COMPANIES  ................................ .......................  15 
10  RISK FINANCE AID FOR SMES  ................................ ................................ ..................  16 
2020  ................................ ................................ ................................ ..............................  17 
1  THE AGRICULTURAL SECTOR  ................................ ................................ ......................  17 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVATION  ................................ ...........  19 
2.1  Technical Development Fund  ................................ ................................ ......................... 19 
2.2  Research Fund  ................................ ................................ ................................ ............ 20 
2.3  Support for R&D in marine aquaculture  ................................ ................................ .......... 20 
3  SUPPORT TO SMALL AND MEDIUM -SIZED COMPANIES  ................................ ..............  21 
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies  
and export promotion (Case 93 -221))  ................................ ................................ .................. 21 
3.2  Regional Development Fund  ................................ ................................ .......................... 22 
4  SUPPORT FOR EMPLOYMENT 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  ................................ ................................ ................................ .. 25 
5.1  Assistanc e to Employment Development Projects  ................................ ............................ 25 G/SCM/N/372/ISL  
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  5.2  Assistance to Local Economic Development  ................................ ................................ .....25 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PRODUCTION IN ICELAND  .................  26 
7  RURAL TOURISM  ................................ ................................ ................................ ........  27 
8  AID TO PROMOTE MARKETING OF ICELANDIC TOURISM  ................................ ............  28 
9  SCHEME TO SUPPORT INNOVATION COMPANIES  ................................ .......................  28 
10  RISK FINANCE AID FOR SMES  ................................ ................................ ..................  29 
11  COVID -19 TEMPORARY MEDIA SUPPORT SCHEME  ................................ ....................  29 
 
 
  G/SCM/N/372/ISL  
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  2019  
1  THE AGRICULTURAL SECTOR  
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. RESPONSIBILITY AUTHORITY  
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 la rgest 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 opportunities present in the country 's rural areas, for th e 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 agr icultural 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 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 9 are made under items 04 -801, 04 -805 
and 04 -807 of the State budget (Ministry o f Industries and Innovation).  
E. AMOUNT OF SUBSIDY  
Items making up the amount of support as measured by total costs in Government Accounts for 
2019 are listed in table 1.  
Table 1 Amount of support in 2019  (Government Accounts); Million ISK  
 2019 
Agricultural Productivity Fund  151 
Directs payments to sheep farmers  2,210  
Quality control scheme; sheep farmers  1,925  
Wool utilization; subsidies  389 
Direct payments to dairy farmers  4,908  
Direct payments to horticulture farmers  291 
Electricity subsidies to horticulture farmers (greenhouse)  296 
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 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).  G/SCM/N/372/ISL  
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  1. Dairy farmers  
Milk producers receive direct paym ents 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 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 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 unt il 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 productio n 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 9 
Year Milk, received by dairies by 
fat-content  Exported products by 
fat-content, thereof (%)  
2019 146,985  3% 
Table 3 Sheep meat production and exports 201 9 (in 1,000 kg)  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2019 9,717  29% 
 G/SCM/N/372/ISL  
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  Table 4 Tomato, cucumber and bell pepper production and exports 201 9 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,183  1,924  202 <1% 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVATION  
2.1  Tech nical Development Fund  
A. RESPONSIBLE AUTHORITY  
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 d evelopment.  
C. AMOUNT AND FORM OF STATE AID  
The amount of State aid in 2019: ISK 2,265  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 -ordinati on 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 consulta tion 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 th eir 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 EFFECT  
The support is granted to a variety of small p rojects and sectors, therefore it is difficult to present 
statistical data permitting an assessment of trade effects.  
G. DURATION  
The Technology Development Fun d has been operating since 2004. It  took over from the Technology 
Fund which expired in 2004.  G/SCM/N/372/ISL  
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  2.2  Rese arch Fund  
A. RESPONSIBLE AUTHORITY  
The Icelandic Centre for Research (Rannís)  which is under the supervision of the Ministry of Culture 
and Education.  
B. POLICY OBJECTIVE  
The objective of the Research Fund is to facilitate fundamental research at University inst itutes or 
other Governmental R&D institutes.  
C. AMOUNT AND FORM OF STATE AID  
The amount of State aid in 20 19: ISK 2,626  million.  
D. RULES AND CONDITIONS  
Subsidies are granted only on the basis of project applications. The Funds grants are for fundamental 
research at Uni versities 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 project s 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 Scien ce Fund  which expired in 
2004.  
2.3  Support for R&D in marine aquac ulture  
A. RESPONSIBLE AUTHORITY  
Ministry of Fisheries and Agriculture . 
B. POLICY OBJECTIVE  
To enhance scientific knowledge in marine aquaculture.  G/SCM/N/372/ISL  
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  C. FORM OF SUPPORT  
Grants.  
D. AMOUNT OF SUPPORT  
2019: ISK 31.3 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, but each program me 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 COMPANIES  
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and e xport 
promotion (Case 93 -221)).  
A. RESPONSIBLE AUTHORITY  
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, product development, marketing and 
innovation.  
C. FORM O F 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 SUPPORT  
2019: ISK 67.0 million . 
E. RULES AND CONDITIONS  
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accordance 
with the  EEA de minimis  rules, entities  that apply for grants according to these rules must declare 
that they have 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 program me is decided o n for a year at a time.  G/SCM/N/372/ISL  
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  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 AUTHORITY  
Innovation Center Iceland (Nýsköpunarmiðstöð Íslands)  which is under the supervision 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 culturally.  
C. FORM OF SUPPORT  
Grants.  
D. AMOUNT OF SUPPORT  
2019: ISK 502.5  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 EMPLOYMENT AND TRAINING . 
4.1  Vocational Training Fund Support for Vocational Training  
A. RESPONSIBLE AUTHORITY  
Ministry of Education and Culture . 
B. POLICY OBJECTIVE  
The main purpose of this program me is to maintain and develop vocational skills, in most cases for 
people already employed.  G/SCM/N/372/ISL  
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  C. FORM OF STATE AID  
Grants.  
D. AMOUNT OF STATE AID  
Actual total expenditure in 2019: ISK 1,368.0 million . 
E. RULES AND CONDITIONS  
Grants to organizations on application to th e Vocational Training Fund mainly to make curriculum or 
other teaching materials for the vocational training courses.  
F. DURATION  
The program me 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 program me is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
C. FORM OF STATE AID  
Soft loans , 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 disposition.  
D. AMOUNT OF STATE AID  
Actual total expenditure in 20 19: ISK 47,0 million  
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new jobs are 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 program me started in 1990. Duration has not been specified.  
G. LEGAL BASIS  
Governmental decision from 1990 . G/SCM/N/372/ISL  
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  4.3  Vocational Rehabilitation  
A. RESPONSIBLE AUTHORITY  
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.  
D. AMOUNT OF STATE AID  
Actual total expenditure in 20 19: ISK 1,141.4 million . 
E. RULES AND CONDITIONS  
The rehabilitation centres  must have operating license from the Ministry of Welfare  to apply to the 
Ministry for subsi dies. 
F. DURATION  
The new program me 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. 07-986 and 07 -988. 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
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 th e 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 20 19: ISK 90.9 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.  G/SCM/N/372/ISL  
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  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 Peopl e and the Budget item No. 07-981.1 21. 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
Institute of Regional  Development (Byggðastofnun).  
B. POLICY OBJECTIVE  
The objective of the program me 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 2019 : ISK 210.7 million.  
E. RULES AND CONDITIONS  
The program me is available to individuals, private companies, local dev elopment 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 program me 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 AUTHORITY  
Institute  of Regional  Development (Byggðastofnun).  
B. POLICY OBJECTIVE  
The objective of the program me is to assist local economic development companies and to finance 
venturesome projects within the field of local employment development and innovation.  G/SCM/N/372/ISL  
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  C. FORM OF STATE A ID 
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
D. AMOUNT OF STATE AID  
Actual total expenditure in 2019 : ISK 251.7 million.  
E. RULES AND CONDITIONS  
According to Act No. 106/1999, on the Institute of Regi onal 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 program me 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 INFORMATION  
The Institute of Regional Development is authorized ac cording 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 PRODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
Icelandic film centre  (Kvikmyn damiðstöð 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 pro duced in Iceland.  
According to the Act authorisation is granted for the reimbursement 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 tota l 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 dedu ctible 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 . G/SCM/N/372/ISL  
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  C. FORM OF STAT E 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 expen diture (reimburse ment of production cost) in 2019 : ISK 1,125.7  million.  
E. RULES AND 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 fulf illed: 
(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;  
(c) a spe cific 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 con tent 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 is intended for 
general distribution to cinemas or television stations, the c ontent of the film or television 
programme shall not violate the Film Censorship and Prohib ition 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. G/SCM/N/372/ISL  
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  7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
Minister of Tourism, Industry and Innovation . 
B. POLICY OBJECTIVE  
The objective of the program me is to promote rural tourism and assist local museums, and places 
of historical importance, in attract ing tourists.  
C. FORM OF STATE AID  
Grants to projects.  
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2019 : ISK 191.3  million.  
E. DURATION  
The program me has no time  limit, the amounts are decided on in the Budget each year.  
F. LEGAL BASIS  
Budget, item No. 04-551. 
8  AID TO PROMOTE MARKETING OF ICELANDIC TOURISM  
A. RESPONSIBLE AUTHORITY  
Minister of Tourism, Industry and Innovation  and Icelandic Tourism Board  (Ferðamálastofa).  
B. POLICY OBJECTIVE  
The objective of the program me is to promote marketing of Icelandic tourism.  
C. FORM OF STATE AID  
Grants to projects.  
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2019 : ISK 1,017.6  million.  
E. DURATION  
The amounts are decided on in the Budget each year.  
F. LEGAL BASIS  
Budget, item No. 04-559.1.44.  
9  SCHEME TO SUPPORT INNOV ATION COMPANIES  
A. RESPONSIBLE AUTHORITY  
Ministry of Finance and Economic  Affairs . G/SCM/N/372/ISL  
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  B. POLICY OBJECTIVE  
The objective of the program me 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 2019 : ISK 3,104.4 million.  
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 AUTHORITY  
Ministry of Finance and Economic  Affairs  and Directorate of Internal Revenue  (Ríkisskattstjóri).  
B. POLICY OBJECTIVE  
The objective of the program me 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 2019: ISK 99.8 million.  
E. DURATION  
The programme started 30/06/2016 and is limited to end of year 20 22. 
F. LEGAL BASIS  
Article 30(1), section B, of the Income Tax Act No . 90/2003 . 
  G/SCM/N/372/ISL  
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  2020  
1  THE AGRICULTURAL SECTOR  
A. NAME OF THE PROGRAMME  
Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture farms  
(Budget items No: 04 -801, 04 -805 & 04 -807).  
B. RESPONSIBLE AUTHORITY  
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 conducive to creating economic value and to making 
the most of opportunities present in the country 's rural areas, for the bene fit 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 agricultu ral 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 indirectly coupled with production factors. Direct payme nts are 
provided to cattle (mainly dairy) and sheep producers, and, on a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2020 are made under items 04 -801, 04 -805 
and 04 -807 of the State budget (Ministry of Ind ustries and Innovation).  
 
E. AMOUNT OF SUBSIDY  
Items making up the amount of support as measured by total costs in Government Accounts for 
2020 are listed in table 1.  
 
Table 1  Amount of support in 2020 (Government Accounts); Million ISK  
 2020  
Agricultural Productivity Fund  172 
Directs payments to sheep farmers  2,331  
Quality control scheme; sheep farmers  1,759  
Wool utilization; subsidies  334 
Direct payments to dairy farmers  4,628  
Direct payments to horticulture farmers  332 
Electricity subsidies to horticulture farmers (greenhouse)  375 
 
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 target for sheep meat entitlemen ts and direct payments for horticulture.  Administered prices 
are infused for milk.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/372/ISL  
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  1. Dairy farmers  
Milk producers receive direct payments from the Government on milk d elivered 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 mo nthly 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. Addition al 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 paymen ts 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 fr om 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, presente d 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 2020  
Year Milk, received by dairies by 
fat-content  Exported products by 
fat-content, thereof (%)  
2020 142,779  3% 
 
Table 3  Sheep meat production and exports 20 20 (in 1,000 kg)  
Year Milk, received by dairies by 
fat-content  Exported products by fat -
content, thereof (%)  
2020 9,490  24% 
 G/SCM/N/372/ISL  
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  Table 4  Tomato, cucumber and bell pepper production and exports 20 20 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,163  1,808  203 <1% 
 
 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVATION  
2.1  Technical Development Fund  
A. RESPONSIBLE AUTHORITY  
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 STATE AID  
The amount of State aid in 2020: ISK 2,988 million.  
  
D. RULES AND CONDITIONS  
The role of the fund is to support research and development activities, which aim towards innovation 
in Iceland ic 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 giv e 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 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 specif ic 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 e stablishing 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 i s granted to a variety of small 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 Technolog y 
Fund which expired in 2004.  
 G/SCM/N/372/ISL  
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  2.2  Research Fund  
A. RESPONSIBLE AUTHORITY  
The Icelandic 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.  
 
C. AMOUNT AND FORM OF STATE AID  
The amount of State aid in 2020: ISK 2,811 million.  
 
D. RULES AND CONDITIONS  
Subsidies are granted only on the basis of project applic ations.  The Funds grants are for fundamental 
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 infrast ructure 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 furth er 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 
evaluatio n 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 projects 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 marine aquaculture  
A. RESPONSIBLE AUTHORITY  
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
Grants.  
 G/SCM/N/372/ISL  
- 21 - 
  D. AMOUNT OF SUPPORT  
2020: 85.95 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.   
 
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 COMPANIES  
3.1  Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export 
promotion (Case 93 -221))  
A. RESPONSIBLE AUTHORITY  
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, product 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 SUPPORT  
2020: ISK 0.0 million.  
  
E. RULES AND CONDITIONS  
Firms and individuals having a registered domicile in Iceland can apply for a grant.  In accordance 
with the EEA de minimis  rules, entities that apply for grants according to these rules must declare 
that they have not received a grant from the Government amounts to more than 200,000 EURO last 
three  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. 
 G/SCM/N/372/ISL  
- 22 - 
  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 AUTHORITY  
Innovation Center Iceland (Nýsköpunarmiðstöð Íslands)  which is under the supervision 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 en tire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
Grants.  
 
D. AMOUNT OF SUPPORT  
2020: ISK 492.4 million  
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of applications evaluated by a special committee.  
 
F. DURATION  
There is no time limi t.  
 
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 EMPLOYMENT AND TRAINING  
4.1  Vocational Training Fund Support for Vocational Training  
A. RESPONSIBLE AUTHORITY  
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  
Grants.  
 G/SCM/N/372/ISL  
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  D. AMOUNT OF STATE AID  
Actual total expenditure in 2020: ISK 1,322.0 million  
 
E. RULES AND CONDITIONS  
Grants to organizations on application to the Vocational Training Fund mainly to make curriculum or 
other t eaching 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 Budget items No. 02 -452.110, 02 -462.110, 02 -463.110 and 
02-461.110.  
 
4.2  Employmen t 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  
Soft loans, 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 disposition.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2020: ISK 78,7 million  
 
It is difficult to give exact information on how many jobs have been created or maintained, as many 
of these new j obs are 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 be en 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 AUTHORITY  
Ministry of Welfare.  G/SCM/N/372/ISL  
- 24 - 
   
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 ce ntres.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2020: ISK 1,256 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 s tarted 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. 07 -986 and 07 -988. 
  
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORITY  
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 2020: ISK 88,6 million.  
 
E. RULES AND CONDITIONS  
Service institutions for disabled people should be deployed in order to meet their sp ecific 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. 08-981.121.  G/SCM/N/372/ISL  
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5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
Institute 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 Regio nal Development.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 2020:  ISK 209.6 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 AUTHORITY  
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 2020: ISK 463.2 million.  
 G/SCM/N/372/ISL  
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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 E FTA 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 IN FORMATION  
The Institute 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 mark et terms, with similar interest rates as on the open 
market.  
 
6  TEMPORARY REPAYMENT OF COSTS OF FILMS PRODUCTION IN ICELAND  
A. RESPONSIBLE AUTHORITY  
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 reimbursement 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 co st 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 th e 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 specif ic 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 (reimbu rsement of production cost) in 2020: ISK 2,402.3 million.  
 G/SCM/N/372/ISL  
- 27 - 
  E. RULES AND 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;  
 
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 confirma tion 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 manuscri pt, 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 is 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 V iolent 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 Bu dget item No. 04-521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHORITY  
Minister of Tourism, Industry and Innovation.  
 
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.  
 G/SCM/N/372/ISL  
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  D. AMOUNT OF STATE AID  
Total expenditure allowed in 2020:  ISK 224.9 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. 
 
8  AID TO PROMOTE MARKETING OF ICELANDIC TOURISM  
A. RESPONSIBLE AUTHORITY  
Ministry of Tourism, Industry and Innovation and Icelandic Tourism Board (Ferðamálastofa).  
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote marketing of Icelandic tourism.   
 
C. FORM OF STATE AID  
Grants to projects.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2020:  ISK 780 million.  
 
E. DURATION  
The amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
Budget, item No. 04-559.1.44.  
 
9  SCHEME TO SUPPORT INNOVATION 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 g iving 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 2020: ISK 5,185.6 million.  
 
E. DURATION  
Duration not limited.  G/SCM/N/372/ISL  
- 29 - 
   
F. LEGAL BASIS  
Act No. 152/2009 on support for innovation enterprises.  
 
10  RISK FINANCE AID FOR SMES  
A. RESPONSIBLE AUTHORITY  
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 inv estment 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 projec ts. 
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2020: ISK 143.7 million.  
 
E. DURATION  
The programme started 30/06/2016 and is limited to end of year 2022.  
 
F. LEGAL BASIS  
Article 30(1), section B, of the Income Tax Act No 90/2003.  
 
11  COVID -19 TEMPORARY MEDIA SUPPORT SCHEME  
A. RESPONSIBLE AUTHORITY  
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
The objective of the measure is to ease the operating burden of private media entities and respond 
to the temporary financial difficulties faced by th e sector due to the COVID -19 pandemic,  
 
C. FORM OF STATE AID  
Grants to entities.  
 
D. AMOUNT OF STATE AID  
Total expenditure allowed in 2020: ISK 400 million.  
  
E. DURATION  
The programme started 2020 and is limited to one year.  
 G/SCM/N/372/ISL  
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  F. LEGAL BASIS  
Media Act No . 38/2011.  
 
__________