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.