Iceland – VAT rate changes for 2013

Effective September 2013, the VAT rate on rental of hotel and guestrooms and other accommodation (including campground facilities) will increase from 7% to 14%.

With this change, Iceland will have four VAT rates on goods and services:

  • The standard VAT rate of 25.5%
  • The VAT rate of 14% on hotel and guestrooms and other accommodation services
  • A reduced VAT rate of 7% applies to specific goods and services
  • A VAT rate of 0% on certain services and goods (for example, exported goods as well as labor and services provided abroad)

Another VAT change is that effective 1 January 2013, movie tickets to Icelandic films are no longer exempt from VAT, but are subject to the standard VAT rate of 25.5%.

Effective 1 July 2013, the VAT rate on condoms, reusable diapers, and diaper fillers (custom 9619.0091) will be reduced from 25.5% to 7%.