E-invoicing in Iceland

Iceland does not currently operate a mandatory e-invoicing regime for public sector transactions equivalent to EU member states under Directive 2014/55/EU.

However, e-invoicing is increasingly used in practice for public procurement and government suppliers.

• Public entities may accept e-invoices, often based on agreed formats or service provider solutions.
• There is no nationwide requirement to use a specific standard such as EN 16931.
• Submission methods vary depending on the public body and contractual arrangements.

Paper invoices may still be accepted, although electronic invoicing is encouraged for efficiency.

Iceland does not operate a real-time invoice clearance system.
 

• B2B invoices must comply with Icelandic VAT invoicing rules under the Value Added Tax Act.
• Invoices may be issued in paper or electronic format, provided authenticity of origin, integrity of content, and readability are ensured.
• E-invoicing is used in practice, particularly by larger businesses, but there is no mandatory format or central platform.
  
  

There is no mandatory real-time transmission of invoice data to the Directorate of Internal Revenue (Skatturinn) at the time of issuance. 

Invoices issued to private individuals are subject to standard Icelandic VAT invoicing requirements.

• Simplified invoices or receipts may be issued for lower-value transactions.
• There is no real-time reporting obligation for B2C invoices.
• Retail transactions are typically documented through accounting systems and point-of-sale systems.
   

Relevant invoice and sales data must be retained in accounting records for tax compliance purposes. 

Iceland does not operate a continuous transaction control (CTC) or real-time invoice clearance model.

• Invoice data is not transmitted automatically to the tax authority at the time of issuance.
• VAT compliance is monitored primarily through periodic VAT returns and tax audits.
• Businesses must maintain accounting records and provide them electronically upon request.
   

Iceland has not implemented SAF-T or mandatory real-time reporting systems but continues to develop its digital tax administration capabilities.

Failure to comply with VAT invoicing or record-keeping obligations may result in:

• Monetary penalties
• Interest on unpaid VAT
• Administrative fines for incorrect or missing invoices
• Increased audit activity by the Directorate of Internal Revenue
   

While Iceland does not operate a strict real-time reporting regime, accurate invoicing and proper VAT reporting remain essential to ensure compliance and avoid penalties.