Icelandic VAT rates and compliance

Icelandic VAT rates

There are 2 two VAT rates, plus a nil rating:

The current rates are:

Icelantic VAT rates

Rate Type Which goods or services
24% Standard All other supplies
11% Reduced Hotel accommodation and services; newspapers; foodstuffs; travel agents; and passenger transport
0% - Nil rated: Exports; ships and aircraft; and export services
% - 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.

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