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).

NetISK 100

VAT (24 %)ISK 24

GrossISK 124

Dataset last reviewed 2026-07-18 · tax year 2026 · 14 documented values⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.

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.

Sources and verification

Dataset last reviewed 2026-07-18 · tax year 2026 · 14 documented values

Rates and thresholds use official primary sources where available, reputable secondary sources when primary access is unavailable, and clearly labelled derived formulas. Each value retains its verification status.

7 sources

Skatturinn (Directorate of Internal Revenue, Iceland) — Mandatory employee pension contribution 4% of gross
Skatturinn (Directorate of Internal Revenue, Iceland) — Tryggingagjaldshlutfallid samtals 6,35% a stadgreidsluarinu 2026 (employer social security levy)
Skatturinn (Directorate of Internal Revenue, Iceland) — Reiknad endurgjald 2026: lowest general (unskilled work) reference category E(4), ISK 651,000/month minimum calculated remuneration
Skatturinn — Income tax bracket 1 upper bound ISK 498,122/month
Skatturinn (Directorate of Internal Revenue, Iceland) — Stadgreidsla 2026: within the 31,49% combined bracket-1 rate, 16,55% is state income tax (tekjuskattur), the remainder is utsvar (municipal tax)
Skatturinn — VAT standard rate 24%
Skatturinn (Directorate of Internal Revenue, Iceland) — Mandatory VSK registration when taxable turnover exceeds ISK 2,000,000 in a 12-month period

⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.

Iceland tax guides

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