Iceland raises VAT on hotels and other services

Iceland has reshuffled its reduced VAT rates on a number of services.

A number of services were previously categorised at the lower, 7% reduced VAT rates.  These have now been upgraged to the standard VAT rate.  These include hotels, accommodation and cinema admissions.  The new rates apply from 1 January 2013.

In January 2010, Iceland raised its higher, standard VAT rate to 25.5%.  Some services will still remain at the zero VAT rate.