Iceland doesn't have many trees, they are quite rare. In fact, there is only a handful of places you can call forest in the whole country.
This however does not mean that you can't see any colors during the fall time. In late September, the foliage on the landscape turns really colorful.
I was driving in northern Iceland, near lake Myvatn. The weather was cloudy but at some point, the sun came out from a hole in the clouds and I immediately saw how the colors got really vivid on the foliage. I quickly found a place to stop next to the road to take some photos.