Iceland VAT (VSK) calculator 2026
Add VAT to a net amount or remove it from a gross amount. Iceland applies a standard rate of 24% and a reduced rate of 11% (food, books, accommodation, energy).
How this is calculated
- Choose whether to add VAT (virdiaukaskattur, VSK) to a net amount or remove it from a VAT-inclusive gross amount.
- To add VAT: multiply the net by 1.24 (the 24% standard rate) or by 1.11 (the 11% reduced rate). To remove VAT: divide the gross by 1.24 or 1.11.
- Select the applicable Icelandic rate: 24% standard or 11% reduced (food, books, heating, hotel accommodation, and certain other goods and services).
FAQ
What are Iceland's VAT rates in 2026?
Iceland applies a 24% standard VAT rate and an 11% reduced rate. The 11% rate covers food, books, newspapers, district heating, hotel and guesthouse accommodation, passenger transport, and some other categories. Verify the current classification with Skatturinn.
When must a business register for VAT in Iceland?
A business must register for VAT once its annual turnover exceeds the statutory registration threshold. Voluntary registration is also possible below the threshold. Check the current threshold and procedures with Skatturinn (irs.is).
Is Iceland in the EU VAT area?
No. Iceland is not an EU member state. It participates in the European Economic Area (EEA) but operates its own independent VAT system administered by Skatturinn.
Official sources
Data last verified 2026-07-18 · tax year 2026 · 9 sourced values
Every rate, threshold and formula is read from a versioned dataset of official primary sources — no numbers are hardcoded. Values without a published 2026 primary source are flagged, never guessed.
4 sources
- Skatturinn (Directorate of Internal Revenue, Iceland) — Mandatory employee pension contribution 4% of gross
- Skatturinn — Income tax bracket 1 upper bound ISK 498,122/month
- Skatturinn — Personal tax credit (personuafslattur) ISK 72,492/month
- Skatturinn — VAT standard rate 24%
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.
Iceland tax guides
- How Income Tax Works in Iceland (2026): Three Monthly Brackets and the Personal Tax Credit →
- Social Contributions in Iceland (2026): Pension 4%, Employer Tryggingagjald 6.35% Explained →
- Self-Employed Taxes in Iceland (2026): Reiknad Endurgjald, Income Tax and Tryggingagjald →
- How VAT (VSK) Works in Iceland (2026): 24% Standard Rate, 11% Reduced Rate and Registration →