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.
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...