VAT Atlas · entry № 29 · current as of April 2026
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Iceland
EEA member · Icelandic króna · code ISStandard VAT rate, reduced categories, registration thresholds, and e-invoicing rules for Iceland.
Standard rate
24%
Reduced 11% hotels, transport, media, food, geothermal energy
Zero-rated 0% exports
Threshold 2 000 000 ISK ~€13,000
Filing Bimonthly
§ Invoicing rules what you need to know
Tax authority Ríkisskattstjóri (RSK)
Invoice language Icelandic
Reverse charge Reverse charge applies to imported services and cross-border B2B services from abroad. Iceland follows EEA principles similar to the EU reverse charge mechanism.
Digital services B2C digital services to Icelandic consumers are taxed at 24%. Non-resident suppliers of digital services must register for VAT in Iceland.
Penalties Late VAT filing incurs a surcharge of 1% of the tax due per day of delay (capped at 10%). Additional fines may apply for repeated non-compliance.
Invoice requirements
- Sequential invoice numbering required
- Seller’s kennitala (national ID) and VSK number must be shown
- Invoice must include date of issue and description of goods/services
- Net amount, VAT rate, and VAT amount must be stated
- Invoices must be stored for 7 years
Frequently Asked Questions
What is the standard VAT rate in Iceland?
The standard VAT rate in Iceland is 24%.
What are the reduced VAT rates in Iceland?
11% (Reduced): applies to hotels, transport, media, food, geothermal energy.
What is the VAT registration threshold in Iceland?
The VAT registration threshold in Iceland is 2 000 000 ISK. ~€13,000
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