Iceland — Value-added tax (VAT)
|General VAT Rate||Other Rates||Local Currency|
|24%||11%, 0%||Krona (ISK)|
Iceland's general VAT rate is 24%, with other rates including 11% and 0% that can apply to certain transactions. The Value-added tax (VAT) is administered by the Ministry of Finance (www.fjarmalaraduneyti.is) in Reykjavik.
Visitors to Iceland can qualify for a VAT refund on all purchases made for export - learn more about Iceland VAT refunds here.
Iceland has an 11% reduced VAT rate on: hotels; books; TV broadcasting; foodstuffs.
Iceland is a member of the European Economic Area (EEA) trading bloc, which may affect international VAT collection and regulations.
Iceland's consumption tax is called the Value-added tax (VAT), locally known as Virðisaukaskattur, which was introduced in January 1990.
Iceland VAT rates for 2018
- 11% and zero-rated (0%)
Iceland VAT number format
Businesses in Iceland that are required to collect tax will be issued an identification number. Tax identification numbers can be verified with the Ministry of Finance, and will follow a certain format. The VAT number format is 12345.
Iceland VAT return periods for parties subject to registration
Businesses in Iceland that are required to collect tax from consumers must file regular tax returns with the Ministry of Finance in Reykjavik. Iceland's VAT return periods for parties subject to registration are:
Annual (turnover less than ISK3,000,000)
Twice a year (agriculture)
Monthly (output VAT habitually lower than input VAT)
Weekly (fish processing)
Iceland Value-added tax (VAT) Thresholds
These are the revenue thresholds at which businesses in Iceland are required to start collecting and remitting tax.
- ISK1,000,000 (registration optional if turnover is lower)
Recovery of VAT by non-established businesses
Non-established businesses are small, unincorporated businesses that sell taxable goods and may consist of a single individual, or several. Non-incorporated businesses in Iceland are required to collect taxes from the consumer.
Iceland VAT Refunds
Iceland has a VAT refund program that allows tourists and others to receive a refund of any Iceland VAT paid on goods purchased in Iceland that are being exported from the country.
The minimum purchase amount needed to claim a VAT refund is €6000.00 Euros (which would yield a VAT refund of about €1440). SalesTaxHandbook has detailed information about Iceland's VAT refund program:Learn More About Iceland VAT Refunds
Iceland Tax Sources & Citations
- EN: Iceland Value Added Tax
- RU: НДС Исландия
- CN: 冰岛 增值税
- Iceland Ministry of Finance (www.fjarmalaraduneyti.is)
- Ernst & Young global VAT tax study, Iceland (updated 2018)
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