Iceland VAT
Iceland introduced Value Added Tax (VAT) in January 1990. The local term is Virðisaukaskattur.
Icelandic VAT is generally based on the European Union VAT regime since Iceland is a member of the European Economic Area. It is administered by the Ministry of Finance.
What activities require an Icelandic registration?
Non-resident companies providing the following taxable goods or services may have to apply for a VAT registration number:
- Domestic provision of taxable goods or services
- Domestic reverse-charge services received in Iceland. These services include: consultancy; advertising; agency; telecoms; and copyright, trademarks and IP.
- Importing goods
Most B2B services provided to Icelandic businesses do not require a registration from the foreign provider – the reverse charge should be applied instead.
Need help with your Icelantic VAT compliance?
Researching Icelantic VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
Latest Icelandic news
April 10, 2018
Iceland’s Ministry of Finance and Economic Affairs is to reclassify electronic books as zero-rated for Value Added Tax from 1 January 2019. E-books are...
December 12, 2017
The new Icelandic government has scrapped plans to introduce VAT on short-term room and house rentals. Instead, it will review an Occupancy Tax -...
April 6, 2017
The Icelandic government is planning to reduce its standard VAT rate from 24% to 22.5% from 1 January 2019. The announcement came as part...