Pension Payments for Members Living Abroad
If LSR pension recipients have legal residence abroad, they must confirm annually their entitlement to continued payments. In some cases, documents must be submitted, while in others it is sufficient to log in to My Pages.
- Retirement pension recipients must log in to My Pages.
- Spousal pension recipients must submit confirmation of their current marital status from their country of residence.
- Disability pension recipients must submit a copy of their most recent tax return.
When it is time to provide confirmation, the Fund sends a reminder to pension recipients. It is therefore important that LSR has the correct email address on record to ensure the reminder is delivered. An email address can be registered on My Pages. The reminder specifies the submission deadline and which documents must be provided.
A notification also appears on My Pages, where both spousal and disability pension recipients can submit the requested documents easily. We recommend using this submission method; however, documents may also be sent to the Fund by email at lifeyrir@lsr.is or by regular mail to the Fund’s postal address.
Please note that pension payments will be suspended if the required documents are not received by LSR within the specified deadline.
Suspended pension payments will be paid retroactively, for up to a maximum of four years in accordance with the Act on Limitation, provided that the member submits sufficient documentation confirming their entitlement to continued payments.
Annual Confirmation
- Retirement pension: Log in to My Pages
- Spousal pension: Confirmation of marital status
- Disability pension: Tax return
Taxation of pension income
The Income Tax Act states that, in general, those who have residency abroad and have income from Iceland must pay tax on that income in Iceland.
Double taxation agreements
An exception to that rule may exist if the pensioner resides in a country with which Iceland has concluded a double taxation agreement. In some double taxation agreements, there are provisions that pensioners pay tax on Icelandic pension payments in the country of residence and not in Iceland. In those cases, you can apply for an exemption from Iceland Revenue. Iceland Revenue sends confirmation of exemption to LSR if the application is approved. The pensioner will then be registered as exempt from tax from the time the confirmation is received. LSR does not refund tax that has been paid before the exemption is received. It is reimbursed by Iceland Revenue in the next tax assessment.
Please note that Iceland Revenue only grants an exemption for the current year. The pensioner must therefore renew the exemption at the beginning of each year. Iceland Revenue accepts applications for renewal from 1 December each year.
Please note that:
- According to the law, confirmation of exemption must be sent to LSR from Iceland Revenue.
- LSR is not permitted to apply for an exemption on behalf of pensioners.
- The exemption ceases to apply when the pensioner moves to Iceland and it is the pensioners responsibility to notify LSR of this in order to prevent collection of underpaid tax in Iceland Revenue’s next assessment.
Who can apply for exemption?
LSR advises pensioners to contact Iceland Revenue to find out about their right to an exemption, as double taxation agreements are different and the nature of the pension income and whether the pensioner is an Icelandic or a foreign citizen must be considered.
According to information from Iceland Revenue in October 2024, pensioners living in the Nordic countries cannot apply for an exemption from withholding tax for pension payments.
You can find the application form at Iceland Revenue here: