Following the release of the Panama Papers, he announced on 5 April 2016 that he would resign as prime minister amid public outrage at him for owning an offshore company to shelter money and not disclosing that when entering parliament.

[6] Sigmundur Davíð became a news reporter for Iceland's state broadcasting service in May 2000 before working on the current affairs program Kastljós intermittently from 2002 to 2007.

"[8] He and his wife Anna Sigurlaug Pálsdóttir already owned the offshore company Wintris at the time, having bought it in 2007 from Mossack Fonseca through the Luxembourg branch of Landsbanki and registered it in the British Virgin Islands.

[10] On 22 January 2009, Sigmundur Davíð proposed the support of the Progressive Party's seven votes in the Althing for a minority coalition between the Social Democratic Alliance and the Left-Green Movement, as an alternative to the ruling coalition between the Independence Party and the Social Democratic Alliance, with the aim of forcing early elections.

[13] The country managed to comply with the deficit criteria in 2013 and had begun to decrease its debt-to-GDP ratio,[14] but still had elevated HICP inflation and long-term governmental interest rates.

[22] Sigmundur Davíð was interviewed in April 2016 by the Swedish television station SVTs investigative programme Uppdrag granskning.

When asked specifically about his connections to Wintris, a foreign company and a creditor of failed Icelandic banks, he said he had disclosed all requested information to the government and was unsure how the transactions actually worked.

[24][26] He and his wife both made public statements about "journalist encroachment in their private lives" and insisted their disclosures were complete.

Eight months later, he sold his share of the company to his wife for one US dollar,[27][28] the day before a new law took effect that would have required him to disclose his ownership as a conflict of interest.

[29] These banks had a total business volume nine times Iceland's gross domestic product just before they collapsed and the country had to obtain a loan from the IMF to stabilise its currency.

[35][36] He refused to talk to the Icelandic National Broadcasting Service, and called police when he found reporters from Aftenposten waiting for him at his home.

"[30] Iceland's government named Sigurður Ingi Jóhannsson as interim Prime Minister on 6 April 2016 and called for early autumn elections, effectively ending Sigmundur Davíð's role as PM.

It was suggested that autumn elections would give the government "time to follow through on one of the biggest economic policy changes within Iceland in decades".

[38] Since his resignation as Prime Minister and loss of his party chairmanship, Sigmundur Davíð has repeatedly asserted that he was the victim of a global conspiracy to bring him down.

[46] In December 2018, a leaked recording captured four Centre Party MPs, including Sigmundur Davíð, mocking a disabled woman and other women using denigrating and sexually charged language.