Taxes on goods and services
Various levies and taxes are imposed on goods and services. The principle ones are VAT (value added tax) and commodity tax.
Overview
VAT
- VAT is a general consumer tax and is imposed on all domestic transactions. VAT is also imposed on imported goods and services.
- There are two levels of VAT, i.e. 7% and 25.5%.
- In general, VAT is 25.5%.
- All foodstuffs carry 7% VAT, as do subscription fees, the sale of magazines, music CDs and books, the sale of hot water, electricity and fuel for heating houses and swimming pools. Moreover, restaurant and hotel services carry 7% VAT.
- Some items are exempt from VAT:
- Health services and social services
- Operation of schools and various types of education
- Sports activities and various forms of cultural activities
- Passenger services and postal services
- Property leasing and the renting of parking spaces
- Insurance activities and the services of lending institutions and securities trading
- Lotteries and betting pools
- Various artistic activities and the services of travel agencies
- Funeral services and any services provided by priests
Commodity taxes
- A general cargo due is a fee that is imposed on goods on importation or domestic manufacture. Cargo dues on foodstuffs have been discontinued, except for sugar and sweets.
- An alcohol tax on consumable alcohol imported to Iceland or manufactured in Iceland, whether for sale or private consumption.
- When importing vehicles, the amount of the cargo dues depends on the weight of the vehicle.
Links of interest
- Internal Revenue Directorate
- Customs and taxes, Ministry of Finance
- Directorate of Customs, Taxes
- Taxes and Tax Returns, Multicultural and Information Centre
