Icelandic VAT rates and compliance
Icelandic VAT rates
There are two VAT rates, plus a nil rating:
The current rates are:
|Rate||Type||Which goods or services|
|24%||Standard||All other taxable goods and services|
|11%||Reduced||Hotel accommodation and services; newspapers; foodstuffs; travel agents; and passenger transport; e-books|
|0%||Zero||Exports; ships and aircraft; and export services|
|0%||Exempt||Financial services; residential property leases; education; public transport; cultural and sporting events; and postal services|
Icelandic VAT compliance
As a tax payer, VAT registered business must comply with the rules and record keeping requirements of the VAT Act. This includes invoice format and records. VAT invoices and records must be stored for at least seven years.
Time of supply
VAT on goods is due – the time of supply – the earlier of delivery, invoice or cash advance payment. For services, it is the time of supply or invoice date if only a short period after the supply.
Import VAT is due at the time of goods clearance into Iceland.
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...
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