G/SCM/N/315/ISL/Rev.1  
 
 
20 June 2019  
(19-4207) 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 A GREEMENT  
ON SUBSIDIES AND COU NTERVAILING MEASURES  
ICELAND  
Revision  
 The following communication, dated 21 May 2019 , is being circulated at the request of the 
Delegation of Iceland.  
 
_______________G/SCM/N/315/ISL/Rev.1  
 
- 2 - 
 
TABLE OF CONTENTS  
2015  ................................ ................................ ................................ ...............................  4 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ......................  4 
2   SUPPORT FOR R&D AND TECHNOLOGICAL IN NOVATION  ................................ ...........  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 COMPAN IES................................ ...............  8 
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies and export  
promotion (Case 9 3-221))  ................................ ................................ ................................ .. 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   Assistance to Employment Development Projects  ................................ .........................  12 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 12 
6   TEMPORARY REPAYM ENT OF COSTS OF FILM S PRODUCTION  IN ICELAND  ...............  13 
7   RURAL TOURISM  ................................ ................................ ................................ ...... 14 
8   AID TO PROMOTE M ARKETING OF ICELANDI C TOURISM  ................................ ..........  15 
9   SCHEME TO SUPPOR T INNOVATION COMPANI ES ................................ .....................  15 
2016  ................................ ................................ ................................ .............................  17 
1   THE AGRICULTURAL  SECTOR  ................................ ................................ ....................  17 
2   SUPPORT FOR R&D AND TE CHNOLOGICAL INNOVATI ON ................................ .........  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 subsidies and export  
promotion (Case 93 -221))  ................................ ................................ ................................  21 
3.2   Regional Development Fund  ................................ ................................ .......................  22 
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   Vocation al Rehabilitation  ................................ ................................ ...........................  23 
4.4   Employment of Handicapped Persons  ................................ ................................ ..........  24 
5   REGIONAL SUPPORT  ................................ ................................ ................................  25 
5.1   Assistance to Employment Development Projects  ................................ .........................  25 
5.2   Assistance to Local Economic Development  ................................ ................................ .. 25 G/SCM/N/315/ISL/Rev.1  
 
- 3 - 
 
  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 
  G/SCM/N/315/ISL/Rev.1  
 
- 4 - 
 
  2015  
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  
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food sector, ensuring self -sufficiency for the country 's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the extent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
D. FORMS OF SUBSIDY  
Agricul tural 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 sma ller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 201 5 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 su pport as measured by total costs in Government Accounts for 
2015 are listed in table 1.  
Table 1 Amount of support in 201 5 (Government Accounts); Million ISK  
 2015  
Agricultural Productivity Fund  100 
Directs payments to sheep farmers  2,702  
Quality control scheme; sheep farmers  1,723 
Wool utilization; subsidies  441 
Direct payments to dairy farmers  5,538 
Direct payments to horticulture farmers  273 
Electricity subsidies to horticulture farmers (greenhouse)  274 
 
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.  
 
Support is provided for dairy farms, sheep farms and horticulture fa rms (greenhouse).  
 G/SCM/N/315/ISL/Rev.1  
 
- 5 - 
 
  1. Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. 
The annual quantity must be within the allocated supported targets. The amount of 
monetary support is the same for all producers in Ic eland.  
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  
Hortic ulture 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 Go vernment.  
G. DURATION  
The time of application of the agricultural agreements between the Government and the Farmer 's 
Association was until the end of 2016 when the agreements were renegotiated. On 1st January 2017, 
new agreements came into force.  
 
H. LEGAL BASI S 
Act No. 99/1993 on Production, Pricing and Sales of Agricultural Products . 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 prod uction 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 2015  
Year Milk, received by dairies by fat -
content  Exported pr oducts by fat -content, 
thereof (%)  
2015 132,833  <1% 
Table 3 Sheep meat production and exports 2015 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2015 10,185  29% 
Table 4 Tomato, cucumber and bell pepper production and exports 201 5 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,347 1,826 215 <1% G/SCM/N/315/ISL/Rev.1  
 
- 6 - 
 
  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 5: ISK 1. 609 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 insti tutes 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 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 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 invol ves 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 difficult to present 
statistical  data permitting an assessment of trade effects.  
 
G. DURATIO N 
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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 7 - 
 
  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 201 5: ISK 1.642  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 involvement of private companies is v ery 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 grants in accordance with the prio rities 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 completi ng 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.  
 
D. AMOUNT OF SUPPORT  
2015: ISK 18.75  million . 
 
E. RULES AND CONDITIONS  
Grants are awarded on the basis of applicat ions evaluated by a special committee.  
 G/SCM/N/315/ISL/Rev.1  
 
- 8 - 
 
  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 Empl oyment 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  
2015: ISK 67 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 have not received a grant from the Government amou nts 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 -528-1.48. 
 
H. TRADE EFFECTS  
There are no trade effects o f the support due to the general framework of the scheme and limited 
support.  
 G/SCM/N/315/ISL/Rev.1  
 
- 9 - 
 
  3.2  Regional Development Fund  
A. 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  
2015: ISK 102 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 BA SIS 
Act No 69/2015 ( Lög um byggðaáætlun og sóknaráætlun ) and the Budget item  
no. 04-541-1.15 
 
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  
Grants.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 5: ISK 1.3 76 million . 
 G/SCM/N/315/ISL/Rev.1  
 
- 10 - 
 
  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 he Budget item no. 02 -451. 
 
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 will especially be considered.  
  
C. FORM OF STATE AID  
Grants, up to 50% of primary R&D costs, innovation costs and cost of new produ cts, 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 201 5: ISK 59.65  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 AUTHORITY  
Ministry of Welfare.  
 G/SCM/N/315/ISL/Rev.1  
 
- 11 - 
 
  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 201 5 ISK 563 million . 
 
E. RULES AND CONDITIONS  
The rehabilitation centres must have operating license from the Ministry of Welfare to apply to the 
Ministry for subsidies.  On 27 June 2001 the EFTA Surveillance Authority decided to close a case 
concerning the Vocational Rehabilitation Centres (Dec. No. 221/01/COL).  
 
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 no. 08 -856.  
 
4.4  Employment of Handicapped Persons  
A. RESPONSIBLE AUTHORIT Y 
Ministry of Welfare.  
 
B. POLICY OBJECTIVE  
The mai n 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 c entres.  
 
D.  AMOUNT OF STATE AID  
Actual total expenditure in 20 15: ISK 74.6 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/SCM/N/315/ISL/Rev.1  
 
- 12 - 
 
  G. LEGAL BASIS  
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.1.21.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORIT Y 
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 Regional Development.  
 
D. AMOUNT OF STATE AID  
Actual total expenditure in 201 5: ISK 1 82.6 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 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 pr ojects 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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 13 - 
 
  D. AMOUNT OF STATE AID  
Actual total expenditure in 201 5: ISK 242.3 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 s ubsidies 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 Institute of Regional Development is authorized according to Article 11 of Act No  106/199 9 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 5: ISK 1.137,2  million.  G/SCM/N/315/ISL/Rev.1  
 
- 14 - 
 
  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 confirmation by the funding parties and a declaration by the producer to the 
effect th at 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 b e 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 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 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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 15 - 
 
  D. AMOUNT OF STATE AID  
Total expenditure allowed in 201 5: ISK 17.5 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 MARKE TING OF ICELANDIC TO URISM  
A. RESPONSIBLE AUTHORIT Y 
Ministry  of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
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 5: ISK 255.4  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 AUTHORIT Y 
Ministry of Industries and Innovation.  
 
B. POLICY OBJECTIVE  
The objective of the programme is to promote research and development work and to improve the 
competitive conditions of inn ovation 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 2015: ISK 1.581,45 million.  
  G/SCM/N/315/ISL/Rev.1  
 
- 16 - 
 
  E. DURATION  
The programme is limited to end of  year 2019.  
 
F. LEGAL BASIS  
Act No. 152/2009 on support for innovation enterprises.  G/SCM/N/315/ISL/Rev.1  
 
- 17  
 2016  
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  
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro-food sector, ensuring self -sufficiency for the country's major agricultural 
production; seeking to utilize domestic inputs to the extent possible; increasing overall efficiency in 
the agricultural food sector; utilizing export opportunities to the ext ent feasible; securing an 
equitable income for farmers; and integrating environmental issues in agricultural policy.  
 
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, o n a smaller scale, to certain greenhouse 
producers. Allocations for the Agricultural Agreements in 2016 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 amoun t of support as measured by total costs in Government Accounts for  2016 
are listed in table 1.  
Table 1 Amount of support in 2016 (Government Accounts); Million ISK  
 2016  
Agricultural Productivity Fund  116 
Directs payments to sheep farmers  2,734  
Quality control scheme; sheep farmers  1,761  
Wool utilization; subsidies  450 
Direct payments to dairy farmers  5,622  
Direct payments to horticulture farmers  277 
Electricity subsidies to horticulture farmers (greenhouse)  281 
 
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 dai ry farms, sheep farms and horticulture farms (greenhouse).  
 G/SCM/N/315/ISL/Rev.1  
 
- 18 - 
 
  1. Dairy farmers  
Milk producers receive direct payments from the Government on milk delivered to dairies. 
The annual quantity must be within the allocated supported targets. The amount of 
monetary su pport is the same for all producers in Iceland.  
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 far mers 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 until the end of 2016. On 1st January 2017 new agreements came into force.  
 
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. Bel ow, 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 2016  
Year Milk, received by dairies by fat -
content  Exported products by fat -
content, thereof (%)  
2016 139,205  8% 
Table 3 Sheep meat production and exports 2016 (in 1,000 kg)  
Year Production  Exports, thereof (%)  
2016 10,375  27% 
Table 4 Tomato, cucumber and bell pepper production and exports 2016 (in 1,000 kg)  
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,436  1,868  190 <1% 
 G/SCM/N/315/ISL/Rev.1  
 
- 19 - 
 
  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 2016: ISK 2.271 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 ventu res 
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 cons ultation 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 bas e 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 s mall 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 200 4. 
 
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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 20 - 
 
  B. POLICY OBJECTIVES  
The objective of the Research Fund is to facilitate fundamental research at Unive rsity institutes or 
other Governmental R&D institutes.  
 
C. AMOUNT AND FORM OF S TATE AID  
The amount of State aid in 2016: ISK 2.248 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 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 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 contribu te 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 r eview 
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 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 Fun d which expired 
in 2004.  
 
2.3  Support for R&D in marine aquaculture  
A. RESPONSIBLE AUTHO RITY 
Ministry of Fisheries and Agriculture.  
 
B. POLICY OBJECTIVE  
To enhance scientific knowledge in marine aquaculture.  
 
C. FORM OF SUPPORT  
Grants.  
 
D. AMOUNT OF SUPPORT  
2016: 29,15 million ISK  
 
E. RULES AND CONDITI ONS 
Grants are awarded on the basis of applications evaluated by a special committee.  
 G/SCM/N/315/ISL/Rev.1  
 
- 21 - 
 
  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 AUTHORI TY 
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 enterp rises 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 tha n 50% of eligible expenses.  
 
D. AMOUNT OF SUPPORT  
2016: ISK 67,0 million.  
 
E. RULES AND CONDITI ONS 
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 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 e ach programme is decided on for a year at a time.  
 
G. LEGAL BASIS  
The Budget item no. 04 -528-1.48. 
 
H. TRADE EFFECTS  
There are no trade effects of the support due to the general framework of the scheme and limited 
support.  
 G/SCM/N/315/ISL/Rev.1  
 
- 22 - 
 
  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.  
 
B. POLICY OBJECTIVE  
To promote cooperation between local governments, safeguard their interests, suppo rt industries 
and enhance quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
Grants.  
 
D. AMOUNT OF SUPPORT  
2016: ISK 208,5 million  
 
E. RULES AND CONDITI ONS 
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 -541-1.15 
 
H. TRADE EFFECTS  
There are no trade effects of the support due t o 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 AUTHO RITY 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
The main purpose of th is 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 A ID 
Actual total expenditure in 2016: ISK 1.506 million  
 G/SCM/N/315/ISL/Rev.1  
 
- 23 - 
 
  E. RULES AND CONDITI ONS 
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 he Budget item no. 02 -451. 
 
4.2  Employment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHO RITY 
Ministry of Fisheries and Agriculture and the Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
The main purpose of thi s 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 ind ustrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE A ID 
Actual total expenditure in 2016: ISK 50 .70 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 CONDITI ONS 
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, whi ch 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 AUTHO RITY 
Ministr y of Welfare.  G/SCM/N/315/ISL/Rev.1  
 
- 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 centres.  
 
D. AMOUNT OF STATE A ID 
Actual total expenditure in 2016: ISK 104 million  
 
E. RULES AND CONDITI ONS 
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 AUTHO RITY 
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 t hey 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 A ID 
Actual total expenditure in 2016: ISK 81 .8 million.  
 
E. RULES AND CONDITI ONS 
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 -842.1.21.  
 G/SCM/N/315/ISL/Rev.1  
 
- 25 - 
 
  5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHO RITY 
Institute of Regional Development ( Byggðastofnun ). 
 
B. POLICY OBJECTIVE  
The objective of the programme is to assist the ec onomic 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 A ID 
Actual total expenditure in 2016: ISK 190,5 million.  
 
E. RULES AND CONDITI ONS 
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 lim it, 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 AUTHO RITY 
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 STA TE AID  
Grants to finance venturesome projects within the field of local employment development and 
innovation.  
 
D. AMOUNT OF STATE A ID 
Actual total expenditure in 2016: ISK 95 .2 million.  
 G/SCM/N/315/ISL/Rev.1  
 
- 26 - 
 
  E. RULES AND CONDITI ONS 
According to Act No. 106/1999, on the Instit ute 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 
Autho rity 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 INFORM ATION  
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 th e 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 AUTHO RITY 
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 pro grammes 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 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 i n 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 S TATE AID  
Total expenditure (reimbursement of production cost) in 2016: ISK 1.137,2 million.  
 G/SCM/N/315/ISL/Rev.1  
 
- 27 - 
 
  E. RULES AND CONDITI ONS 
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 prod uction;  
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 fi lm 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 a pplication 
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 C ensorship 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, N o. 43/1999, with 
amendments. The Budget item no. 04 -521.  
 
7  RURAL TOURISM  
A. RESPONSIBLE AUTHO RITY 
Ministry of Transport 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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 28 - 
 
  D. AMOUNT OF STATE A ID 
Total expenditure allowed in 2016: ISK 1,20 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. ADDITIONAL INFORM ATION  
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 MARKETING OF  ICELANDIC TOURISM  
A. RESPONSIBLE AUTHO RITY 
Ministry of Transport and Communication and Icelandic Tourism Board ( Ferðamálastofa ). 
 
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 A ID 
Total expenditure allowed in 2016: ISK 55 .4 million.  
 
E. DURATION  
The programme is intended to be temporar y, 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 AUTHO RITY 
Ministry of Industries and Innovation.  
 
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.  
 G/SCM/N/315/ISL/Rev.1  
 
- 29 - 
 
  D. AMOUNT OF STATE A ID 
Total expenditure allowed in 2016: ISK 2.797,10 million.  
 
E. DURATION  
The programme is limited to end of year 2019.  
 
F. LEGAL BASIS  
Act No. 152/2009 on support for innovation enterprises.  
 
10  RISK FINANCE AID FOR  SMES  
A. RESPONSIBLE AUTHO RITY 
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 A ID 
Total expenditure allowed in 2016: ISK 39.902,10 million.  
 
E. DURATION  
The pr ogramme 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.  
 
__________