Iceland Vat rate changes effective September 2013

The Icelandic parliament in late December 2012 approved changes to the rate of value added tax (VAT) on hospitality services, movie tickets, and certain personal- use items. Effective September 2013, the VAT rate on rental of hotel and guestrooms and other accommodation (including campground facilities) will increase from 7% to 14%.

With this change, Iceland will have four VAT rates on goods and services:

  • The standard VAT rate of 25.5%
  • The VAT rate of 14% on hotel and guestrooms and other accommodation services
  • A reduced VAT rate of 7% applies to specific goods and services
  • A VAT rate of 0% on certain services and goods (for example, exported goods as well as labor and services provided abroad)


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