Iceland VAT registration threshold

What this value means

PERIOD BASIS: a rolling 12-month window measured "á hverju 12 mánaða tímabili frá því að starfsemi hefst" (each 12-month period from commencement of the activity) — not the calendar year. Selling ISK 2,000,000 or less in every such window keeps the seller outside the registration duty of 5. gr.; once sales in any 12-month window exceed ISK 2,000,000 the exemption in 3. tölul. 4. gr. falls away and the general duty to notify Skatturinn (form RSK 5.02) and register applies. Sub-threshold businesses stay wholly outside VAT (no charging, no input deduction). NON-ESTABLISHED SUPPLIERS: no separate threshold. The 4. gr. exemption is worded by activity, not by residence, and Skatturinn guidance applies the same ISK 2,000,000-per-12-months test to foreign as to domestic businesses making taxable supplies in Iceland; foreign businesses without an Icelandic establishment register under the general rules (through an agent/fiscal representative where required). For services bought in from abroad by Icelandic businesses, 35. gr. puts the duty on the Icelandic RECIPIENT (reverse charge) where the foreign seller is not registered here — nil threshold for the transaction, no registration duty on the seller. IMPORTED DIGITAL SERVICES: electronically supplied services (plus telecommunications and broadcasting) sold B2C into Iceland by foreign suppliers are taxable in Iceland, and the supplier must register once the same ISK 2,000,000/12-month threshold is crossed. Instead of full registration the foreign supplier may use the simplified VOES registration (VAT on Electronic Services, 5. gr. B, added by lög nr. 77/2018; portal voes.rsk.is): no fiscal representative needed, pay-only status, no input-tax deduction under the ordinary 15.-16. gr. rules. B2B e-services are handled by the Icelandic buyer under 35. gr. and do not force the seller to register. Traps: (1) The window is a rolling 12 months from the start of the activity — testing calendar years finds crossings late. (2) It is an 'exceeds' test: exactly ISK 2,000,000 in a 12-month window is still exempt ("2.000.000 kr. eða minna"). (3) The figure was ISK 1,000,000 until 31 December 2016 (raised by lög 57/2016 from 1 January 2017) — older secondary sources still cite 1,000,000. (4) VOES is optional and only for electronic services, telecoms and broadcasting sold B2C; goods and other services need ordinary registration. (5) VOES registrants cannot deduct input VAT — a supplier with meaningful Icelandic input tax may prefer ordinary registration. (6) For B2B cross-border services the threshold is irrelevant — the Icelandic recipient reverse-charges under 35. gr. (7) The ISK amount is not indexed; no further increase had been enacted as of 2026-08-10.

Get it programmatically

curl https://euroref.dev/v1/is/vat-registration-threshold
# $0.005 per call — x402 on Base (USDC). No key, no signup.
# History:    curl https://euroref.dev/v1/is/vat-registration-threshold/history?from=2020-01-01
# Provenance: curl https://euroref.dev/provenance/is/vat-registration-threshold

Other Iceland series: Central Bank of Iceland key interest rate · Statutory default interest (dráttarvextir) · Virðisaukaskattur (VSK / VAT) standard rate · General statutory minimum wage (none — structural null) · Public holidays (frídagar og helgidagar) · CPI inflation (vísitala neysluverðs, twelve-month change) · Tekjuskattur lögaðila · Withholding tax rates · Tekjuskattur og útsvar einstaklinga · Statutory social-insurance contributions · Central Bank of Iceland reference exchange rates

The same figure elsewhere: Ireland · Italy · Latvia · Lithuania · Luxembourg · all 34