Skip to content
VAT in Iceland guide
Standard VAT/GST rate
24%
Reporting currency
ISK

VAT in Iceland guide

In need of personal consultation?

Register for a consultation with Edgaras. It is completely FREE and you will get many questions answered!

Book a Free consultation

VAT rates

The following are the VAT rates in Iceland:

  • Standard rate: 24%
  • Reduced rate: 11%
  • Zero rate (0%)

The standard rate of VAT applies to all supplies of goods or services unless a specific measure allows a reduced rate, the zero rate or an exemption.

Icelandic VAT for digital service providers

In case of digital services, telecom services or broadcasting services supplied in a B2B context, the place of supply is the place where the recipient is established. No Icelandic VAT should be charged, and reverse charge applies unless supplier and customer are established in Iceland. In case of digital services, telecom services or broadcasting services supplied in a B2C context we refer to the section on the One-Stop Shop below for more information.

One-Stop Shop

On 1 July 2021 EU has introduced a so-called “One-Stop-Shop” (OSS) system which has replaced a previously applied “MiniOneStopShop” (MOSS) system. OSS has extended the scope of MOSS from digital goods and services to all goods and services sold B2C in the EU. OSS is an electronic portal that simplifies VAT compliance for online sellers, i.e., online businesses that sell goods and/or services in the EU are now only required to register for VAT in one EU country for all their B2C sales in the EU. If such sellers’ B2C sales in EU are above the applicable threshold, which is 10.000,00 EUR throughout the EU, businesses are liable to charge, collect and remit VAT in the Member State where their B2C buyers are located, instead of the Member State or country of their incorporation, i.e. online sellers have to apply the VAT rate of the Member State where the goods are dispatched or where the services are supplied. AS each EU Member State has an online portal where businesses can register for OSS and submit their VAT returns in one Member State for their B2C sales throughout the EU, it is estimated that VAT compliance costs will be significantly reduced. Registration in the OSS system is available for both – taxable persons established in the EU and outside the EU.

Late – registration penalties

No specific penalty applies to late VAT registration in Iceland; however, penalties are assessed if, as a result of the late registration, a taxable person submits a late VAT return or pays VAT late.

Need assistance with VAT in Iceland?
We can help!

Dedicated account manager

As our client, you will be assigned to a multilingual account manager who can address all your tax-related inquiries and resolve any issues you may have at any time.

Single point of contact

We serve as single point of contact, simplifying the process and ensuring that your VAT compliance is handled efficiently and effectively within single stop.

Exclusive customer service

We support our clients, ensure fast response time and always go beyond by offering tailored assistance and individual attention.

Certified experts

Our team is combined of more than 30 experts, who can provide wide range of services and are certified members of IVA, AITC and VAT Forum. Currently we have more than 500 clients and knowledge how VAT works in 100 locations.

Grow your business in VAT compliant way

Sign up for our free newsletter and get valuable insights, stay up-to-date with important news, and receive pro tips from our VAT experts.

Register for a FREE consultation

We offer a FREE consultation to better understand your needs. This could result in a simple solution to your taxes issues or lead to a more collaborative working relationship. Let's find out what's the best solution for you!

Get in Touch

What are the consequences of not being compliant?

How to ensure compliance?