G/SCM/N/315/ISL  
 
26 September 2017  
(17-5082) Page: 1/28 
Committee on Subsid ies and Countervailing Measures  Original: English  
 
 SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE G ATT 1994  
AND ARTICLE 25 OF TH E AGREEMENT ON SUBSI DIES 
AND COUNTERVAILING M EASURES  
ICELAND  
The following communication, dated 18 September 2017, is being circulated at the request of the 
Delegation of Iceland.  
 
_______________  G/SCM/N/315/ISL  
 
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  TABLE OF CONTENTS  
2015  ................................ ................................ ................................ ................................  4 
1   THE AGRICULTURAL SEC TOR ................................ ................................ .......................  4 
1.1   Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture 
farms (Budget items No: 04 -801, 04 -805 & 04 -807).  ................................ ..............................  4 
2   SUPPORT FOR R&D AND TECHNOLOGIC AL INNOVATION  ................................ ............  5 
2.1   Technical Development Fund  ................................ ................................ .........................  5 
2.2   Research Fund  ................................ ................................ ................................ ............  6 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ..........  7 
3   SUPPORT TO SMALL AND  MEDIUM -SIZED COMPANIES ................................ ................  8 
3.1   Job Creation Init iative (prior to 1996 known as Firm specific subsidies and export 
promotion (Case 93 -221)).  ................................ ................................ ................................ .. 8 
3.2   Regional Development Fund  ................................ ................................ ..........................  8 
4   SUPPORT FOR EMPLOYME NT AND TRAINING  ................................ ..............................  9 
4.1   Vocational Training Fund. Support for Vocational Training  ................................ .................  9 
4.2   Employment Opp ortunities for Women in Rural Areas  ................................ .......................  9 
4.3   Vocational Rehabilitation  ................................ ................................ ............................. 10 
4.4   Employment of Handicapped Persons  ................................ ................................ ............ 11 
5   REGIONAL SUPPORT  ................................ ................................ ................................ . 11 
5.1   Assistance to Employment Development Projects  ................................ ........................... 11 
5.2   Assistance to Local Economic Development  ................................ ................................ ....12 
6   TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  ................  13 
7   RURA L TOURISM  ................................ ................................ ................................ ....... 14 
8   AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM.  ................................ ..........  14 
9   SCHEME TO SUPPORT IN NOVATION COMPANIES  ................................ ......................  15 
2016  ................................ ................................ ................................ ..............................  16 
1   THE AGRICULTURAL SEC TOR ................................ ................................ .....................  16 
1.1   Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture 
farms (Budget items No: 04 -801, 04 -805 & 04 -807).  ................................ ............................. 16 
2   SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  ................................ ..........  17 
2.1   Technical Development Fund  ................................ ................................ ........................ 17 
2.2   Research Fund  ................................ ................................ ................................ ........... 18 
2.3   Support for R&D in marine aquaculture  ................................ ................................ ......... 19 
3   SUPPORT TO SMALL AND  MEDIUM -SIZED COMPANIES ................................ ..............  20 
3.1   Job Creation Initiative (prior to 1996 known as Firm specific subsidies  and export 
promotion (Case 93 -221)).  ................................ ................................ ................................ .20 
3.2   Regional Development Fund  ................................ ................................ ......................... 20 
4   SUPPORT FOR EMPLOYME NT AND TRAINING  ................................ ............................  21 
4.1   Vocational Training Fund. Support for Vocational Training  ................................ ................ 21 
4.2   Employment Opportunities for Women in Rural Areas  ................................ ...................... 21 G/SCM/N/315/ISL  
 
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  4.3   Vocational Rehabilitation  ................................ ................................ ............................. 22 
4.4   Employment of Handicapped Persons  ................................ ................................ ............ 23 
5   REGIONAL SUPPORT  ................................ ................................ ................................ . 23 
5.1   Assistance to Employment Development Projects  ................................ ........................... 23 
5.2   Assistance to Local Economic Development  ................................ ................................ ....24 
6   TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION IN ICELAND  ................  25 
7   RURAL TOURISM  ................................ ................................ ................................ ....... 26 
8   AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM.  ................................ ..........  26 
9   SCHEME TO SUPPORT IN NOVATION COMPANIES  ................................ ......................  27 
10   RISK FINANCE AID FOR  SMES  ................................ ................................ .................  27 
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  2015  
1  THE AGRICULTURAL SEC TOR 
A. NAME OF PROGRAMME  
 
1.1  Agricultural Agreements; Payments to dairy farms, sheep farms and horticulture 
farms (Budget items No: 04 -801, 04 -805 & 04 -807).  
B. RESPO NSIBLE AUTHORITY  
 
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 ma jor 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 inte grating 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, on a smaller scale, to certain 
greenhouse producers. Allocations for the Agricultural Agreements in 2015 are made under 
items  04-801, 04 -805 and 04 -807 of the State budget (Ministry of Industries and Innovation).  
 
E. AMOUNT OF SUBSIDY  
 
Items making up the amount of support as measured by total costs in Government Accounts 
for 2015 are listed in table 1.  
 
Table 1 Amount of support in 2015 (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 subsidie s 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. Administered 
prices are infused for milk.  
 
Support is provided for dairy farms, sheep farms and horticulture farms (greenhouse).  
 
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 Iceland.  
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  2. Sheep farmers  
 
Sheep farmers receive direct payments from the Government which are based on support targets 
for she ep 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 farm ers; 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 d irect 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 1 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 2015   
 
Year Milk, received by dairies by fat -
content  Exported products 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 2015 (in 1,000 kg)  
 
Tomatoes  Cucumbers  Bell peppers  Total exports, thereof 
(%) 
1,347  1,826  215 <1% 
 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
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.  
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  B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilitate innovation through supporting 
research and techn ological development.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2015: 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 institutes and universities will have the possibility of financing projects that 
support technological development and innovation. The Fund is intended to give support t o 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 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 g ranted 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 
Technolo gy Fund which expired in 2004.  
 
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 faci litate fundamental research at University institutes or 
other Governmental R&D institutes.  
 
C. AMOUNT AND FORM OF STATE AID  
 
The amount of State aid in 2015: ISK 1.642 million.  
 
D. RULES AND CONDITIONS  
 
Subsidies are granted only on the basis of project ap plications. The Funds grants are for 
fundamental research at Universities and the involvement of private companies is very limited or 
non-existent.  G/SCM/N/315/ISL  
 
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The Research Fund is the most powerful tool of the public sector for reinforcing the research 
community inf rastructure 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 f urther 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 evalu ation 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.  
 
D. AMOUNT OF SUPPORT  
 
2015: 18,75 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. 72/2 008 on the Directorate of Fisheries.  
 
H. TRADE EFFECTS  
 
There is no trade effect due to limited support.  
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  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  
 
2015: 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 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 each programme is decided o n 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.  
 
3.2  Regional Development Fund  
A. RESPONSIBLE AUTHORITY  
 
Innovation Center Iceland (NJýsköpunarmiðstöð 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 enhan ce quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
 
Grants.  
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  D. AMOUNT OF SUPPORT  
 
2015: ISK 102,0 million  
 
E. RULES AND CONDITIONS  
 
Grants are awarded on the basis of applications evaluated by a special com mittee.  
 
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 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 AUTHORITY  
 
Ministry of Education and Culture.  
 
B. POLICY OBJECTIVE  
 
The main purpose of this programme is to maintain and dev elop vocational skills, in most cases for 
people already employed.  
 
C. FORM OF STATE AID  
 
Grants.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2015: ISK 1.376 million.  
 
E. RULES AND CONDITIONS  
 
Grants to organizations on application to the Vocation al 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  
 
Act No. 27/2010 and the Budget item no. 02 -451. 
 
4.2  Empl oyment Opportunities for Women in Rural Areas  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development (Byggðastofnun).  
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  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among wo men. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, process and 
systems for industrial production. Institute of Regional Development pays the grants and controls 
their disposition.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2015: 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 h ave 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.  
 
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 reha bilitation centres.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2015: ISK 563,0 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 Ju ne 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.  
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  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 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 2015: 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. 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 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, tr aining 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 182,6 million  
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  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 Regiona l 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 STAT E AID  
 
Actual total expenditure in 2015: 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 Innov ation. These rules 
have not yet been issued. The subsidies are subject to the conditions laid down in the EFTA 
Surveillance Authority State Aid Guidelines and the Map of Regional Aid approved by the EFTA 
Surveillance Authority.  
 
F. DURATION  
 
The programme has no time limit, the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Article 12 of Act no. 106/1999 on the Institute of Regional Development, the Budget item 
no. 04-542.1.10.  
 
H. ADDITIONAL INFORMATION  
 
The Institute of Regional Developm ent is authorized according to Article 11 of Act No 106/1999 to 
provide loans and guarantees, in accordance with the role of the Institute as stipulated in the Act. 
These loans and guarantees are provided on market terms, with similar interest rates as on the 
open market.  
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  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION 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 enh ance 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 cost of a motion picture or television programme 
incurs in Iceland, the reimbursement shall be calcula ted 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. Paymen ts 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 2015: ISK 1.137,2 million.  
 
E. RULES AND CONDITIONS  
 
In asses sing 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 th e 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 eff ect 
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;  
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  (h) a product ion 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 materi al 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 Crimina l 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  AUTHORITY  
 
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 pr ojects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2015: ISK 17,50 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 INFORMATION  
 
The EFTA Surveillance Authority is currently, following a complaint, examining State aid provided 
to promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM.  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Tran sport 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. 47 859. 
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  C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2015: 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  
G. RESPONSIBLE AUTHORITY  
 
Ministry of Industries and Innovation.  
 
H. POLICY OBJECTIVE  
 
The objective of the programme is to promote research and development work and to improve the 
competit ive conditions of innovation companies by giving them the right to deduct tax for the cost 
of innovation projects.  
 
I. FORM OF STATE AID  
 
Grants to projects.  
 
J. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2015: ISK 1.302,40 million.  
 
K. DURATION  
 
The programme is limited to end of year 2019.  
 
L. LEGAL BASIS  
 
Act No. 152/2009 on support for innovation enterprises.  
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  2016  
1  THE AGRICULTURAL SEC TOR 
A. NAME OF PROGRAMME  
 
1.1  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  
 
Agricultural policy is implemented in Iceland in pursuit of objectives which include increasing 
efficiency in the agro -food se ctor, 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  
 
Agricultural subsidies in Iceland is mostly provided through direct payments, based on payment 
entitlements, which are directly o r 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 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 amount 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 paymen ts 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 A ssociation. 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).  
 
1. Dairy farmers  
 
Milk producers receive direct payments fr om 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 Iceland.  
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  2. Sheep farmers  
 
Sheep farmers receive direct payments from the G overnment 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 trace ability, 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 gre enhouses, 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 agricult ural 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 t he trade effects of the subsidies is not available. Below, in tables 2, 3 and 4 
there are, however, presented statistics on production and exports of the relevant agricultural 
commodities.  
 
Table 2 Quantity of milk received by dairies and calculated export s 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  Produ ction  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%  
 
2  SUPPORT FOR R&D AND TECHNOLOGICAL INNOVA TION  
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.  
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  B. POLICY OBJECTIVES  
 
The objective of the Technology Development Fund is to facilit ate innovation through supporting 
research and technological development.  
 
C. AMOUNT AND FORM OF STATE 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 an d 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 init iative 
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 f or seed and early risk financing 
toward establishing firms which base their operations on technological development and research 
and which involves a novelty to the economy.  
 
E. LEGAL BASIS  
 
Act no. 3/2003 on Public Support for Scientific Research, with l ater 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  
 
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 AUTHORITY  
 
The Icelandic Centre for Research (Rannís) which is under the supervision of the Ministry of 
Culture and Education.  
 
B. POLICY OBJEC TIVES  
 
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 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.  G/SCM/N/315/ISL  
 
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The Research Fund is the most powerful tool of the publ ic 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 opportu nity 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 defin ed 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 Res earch, 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 opera ting 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  
 
2016: 29,15 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 f or 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.  
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  3  SUPPORT TO SMALL AND  MEDIUM -SIZED COMPANIES  
3.1  Job Creation Initiative (prior to 1996 known as Firm s pecific 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 co mpetence 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 elig ible 
for grants. Support shall in general not cover more than 50% of eligible expenses.  
 
D. AMOUNT OF SUPPORT  
 
2016: ISK 67,0 million.  
 
E. RULES AND CONDITIONS  
 
Firms and individuals having a registered domicile in Iceland can apply for a grant. In accorda nce 
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 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 of the support due to the general framework of the scheme and limited 
support.  
 
3.2  Region al 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, safegua rd their interests, support industries 
and enhance quality of life in the entire region economically, socially and culturally.  
 
C. FORM OF SUPPORT  
 
Grants.  
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  D. AMOUNT OF SUPPORT  
 
2016: ISK 208,5 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 -541-1.15 
 
H. TRADE EFFECTS  
 
There are no trade effects of the su pport 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 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.  
 
D. AMOUNT OF STATE AID  
 
Actual total expenditure in 2016: ISK 1.506 million  
 
E. RULES AND CONDITIONS  
 
Grants  to organizations on application to the Vocational Training Fund mainly to make curriculum 
or other teaching materials for the vocational training 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 AUTHORITY  
 
Ministry of Fisheries and Agriculture and the Institute of Regional Development (Byggðastofnun).  
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  B. POLICY OBJECTIVE  
 
The main purpose of this programme is to create new jobs among women. Areas where high 
unemployment is among women will especially be considered.  
 
C. FORM OF STATE AID  
 
Grants, up to 50% of primary R&D costs, innovation costs and cost of new products, proce ss 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 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 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.  
 
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 2016: ISK 104,0 million  
 
E. RULES AND CONDITIONS  
 
The rehabilitation centres must have operating license from the Minist ry of Welfare to apply to the 
Ministry for subsidies.  
 
F. DURATION  
 
The new programme started in 1992. Duration has not been specified.  
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  G. LEGAL BASIS  
 
Act No. 60/2012 (lög um atvinnutengda starfsendurhæfingu og starfsemi 
starfsendurhæfingasjóða) and fin anced by the Budget item nos. 08 -856 and 08 -857. 
 
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 2016: ISK 81,8 million.  
 
E. RULES AND CONDITIONS  
 
Service institutions for disabled people should be deployed in order to meet their specific needs so 
that they can live independently.  
 
F. DURATION  
 
No time limit, the amounts are decided on in the Budget each year.  
 
G. LEGAL BASIS  
 
Act No. 59/1992 on the Affairs of Disabled People and the Budget item no. 08 -842.1.21.  
 
5  REGIONAL SUPPORT  
5.1  Assistance to Employment Development Projects  
A. RESPONSIBLE AUTHORITY  
 
Institute of Regional Development (Byggðastofnun).  
 
B. POLICY OBJECTIVE  
 
The obje ctive 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 2016: ISK 190,5 million.  
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  E. RULES AND CONDITIONS  
 
The programme is available to indi viduals, 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 
Authorit y. 
 
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 Developm ent  
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 employmen t 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 2016: ISK 95,2 million.  
 
E. RULES AND CONDITIO NS 
 
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 con ditions 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 INFORMATION  
 
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 market terms, with similar interest rates as on the 
open market.  
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  6  TEMPORARY REPAYMENT OF COSTS OF FILMS PR ODUCTION 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 temporaril y 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 televi sion 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 2016: ISK 1.137,2 million.  
 
E. RULES AND CONDITIONS  
 
In assessing whether a proportion of the production costs of a motion picture or a televi sion 
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, kn owledge 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 item ized 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;  
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  (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 s tations, 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 AUTHORITY  
 
Ministry of Transport and Communication.  
 
B. POLICY OBJECTIVE  
 
The ob jective of the programme is to promote rural tourism and assist local museums, and places 
of historical importance, in attracting tourists.  
 
C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2016: ISK 1,20 mill ion. 
 
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 INFORMATION  
 
The EFTA Surveillance Authority is currently, following a complaint, examining Sta te aid provided 
to promote Icelandic tourism (reference is made to Case No. 47859).  
 
8  AID TO PROMOTE MARKE TING OF ICELANDIC TO URISM.  
A. RESPONSIBLE AUTHORITY  
 
Ministry of Transport and Communication and Icelandic Tourism Board (Ferðamálastofa).  
 
B. POLICY O BJECTIVE  
 
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.  
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  C. FORM OF STATE AID  
 
Grants to projects.  
 
D. AMOUNT OF STATE AID  
 
Total exp enditure allowed in 2016: ISK 55,4 million.  
 
E. DURATION  
 
The programme is intended to be temporary, the amounts are decided on in the Budget each year.  
 
F. LEGAL BASIS  
 
Budget, item no. 04 -559.1.44.  
 
 
9  SCHEME TO SUPPORT IN NOVATION COMPANIES  
A. RESPONSIBLE AUTHORITY  
 
Ministry of 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.  
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2016: ISK 1.581,45 million.  
 
E. DURATION  
 
The programme is limited to end of year 2019.  
 
F. LEGAL BASIS  
 
Act No. 152/2009 on s upport 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 Icel andic 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 investm ent 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.  
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  C. FORM OF STATE AID  
 
Grants to proje cts. 
 
D. AMOUNT OF STATE AID  
 
Total expenditure allowed in 2016: ISK 39.902,10 million.  
 
E. DURATION  
 
The programme started 30/06/2016 and is limited to end of year 2018.  
 
F. LEGAL BASIS  
 
Article 30(1), section B, of the Income Tax Act No 90/2003.  
 
_______ ___