There is a VAT registration threshold for foreign companies providing taxable goods or services in Iceland. This is currently ISK 2 million annual turnover – calculated on a calendar basis. Businesses may apply for a voluntary VAT registration.

Foreign businesses surpassing this limit should register within eight days of passing this threshold and appoint a local VAT representative. This party is responsible for the submission of correct filings on behalf of the foreign tax payer.

Non-resident businesses may not apply for group VAT registrations.

VAT number applications may be applied for using form RSK 5.02. A scanned copy may then be emailed to the Director of Internal Revenue.

Documents required for a foreign company’s registrations include:

• Completed application RSK 5.02
• Appointment form for the local VAT agent
• Articles of Association and Memorandum of Association
• Certificate of Incorporation
• Details of company Directors, plus copies of passports

Businesses may deregister if they fall below the annual registration threshold.

Once VAT registered, businesses will receive a unique 5-digit VAT number, to be added to all tax invoices

Upon receiving a VAT number, businesses must levy, report and pay VAT charged on their taxable supplies.

Get help solving your VAT challenges