Icelandic VAT registration

What are the Icelandic VAT registration thresholds?

There is a VAT registration threshold for foreign companies providing taxable goods or services in Iceland. This is currently ISK 2 million annual turnover – calculated on a calendar basis. Businesses may apply for a voluntary VAT registration.

Foreign businesses surpassing this limit should register within eight days of passing this threshold and appoint a local VAT representative. This party is responsible for the submission of correct filings on behalf of the foreign tax payer.

Non-resident businesses may not apply for group VAT registrations.

What information is required to get an Icelandic VAT number and registration

VAT number applications may be applied for using form RSK 5.02. A scanned copy may then be emailed to the Director of Internal Revenue.

Documents required for a foreign company’s registrations include:

  • Completed application RSK 5.02
  • Appointment form for the local VAT agent
  • Articles of Association and Memorandum of Association
  • Certificate of Incorporation
  • Details of company Directors, plus copies of passports

Businesses may deregister if they fall below the annual registration threshold.


What is the format of an Icelandic VAT number?

Once VAT registered, businesses will receive a unique 5-digit VAT number, to be added to all tax invoices

What next?

Upon receiving a VAT number, businesses must levy, report and pay VAT charged on their taxable supplies.

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

Iceland scraps e-book VAT 2019

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...

Iceland considers Occupancy Tax over VAT

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 -...

Iceland VAT rate to 22.5% 2019

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...