# VSK-reiknivél 2026 — Iceland VAT calculator (24% / 11%)

Source page: https://valem.run/calculators/iceland/vat

Icelandic VAT has two rates: 24% on everything taxable unless the law says otherwise, and 11% on food, accommodation, books, newspapers, heating and some transport. You must register once taxable sales exceed ISK 2,000,000 in any twelve-month period.

**Tax year:** 2026

## How it is calculated

Skatturinn puts it in one line: *"Skattþrepin í virðisaukaskatti eru tvö. 24% 11%."* The **24%** general rate is the default for any taxable good or service. The **11%** rate is a defined list: food and other goods for human consumption in the law’s annex (alcohol included), hotel and other accommodation, books and audiobooks, newspapers and magazines, music recordings, hot water, electricity and oil for heating, passenger transport outside public transport, tour guiding, and admission to baths and spas.

**Alcohol sits in the 11% band**, which surprises most visitors — the high price of a drink in Iceland comes from excise duty, not VAT. Exports and international passenger and goods transport are not taxable turnover at all, which is a different mechanism from a 0% rate, so they are not in the category selector.

**The registration test runs over any twelve months, not a calendar year.** A business whose taxable sales exceed ISK 2,000,000 in any twelve-month period from the start of its activity must register, and the invoice that crosses the line must already carry VAT. Below the limit, registration is optional — and an unregistered seller may not show VAT on its invoices at all.

## Worked example

With Amount of 10,000, this model computes VAT of 2,400 ISK.

## Inputs

| Name | Label | Type |
| --- | --- | --- |
| `amount` | Amount (ISK) | number |
| `direction` | Direction | string |
| `category` | What is being supplied | string |
| `reverseCharge` | No VAT charged by you: an export, or the customer accounts for the tax | boolean |
| `turnover12Months` | Taxable sales in the last twelve months (ISK) | number |

## Sources

- [Skatturinn — Skattskylda og skattprósentur: the two VAT rates, 24% and 11%, and the 11% categories (lög nr. 50/1988)](https://www.skatturinn.is/atvinnurekstur/virdisaukaskattur/skattskylda-og-skattprosentur/nr/100) (checked 2026-10-12)
- [Skatturinn — Skráning á VSK-skrá: registration once taxable sales exceed ISK 2,000,000 in any twelve-month period](https://www.skatturinn.is/atvinnurekstur/virdisaukaskattur/skraning-a-vsk-skra/nr/101) (checked 2026-10-12)

## What this page claims

The Valem engine reproduces this model's formula through 6 self-test cases. That shows internal consistency, not that the formula matches current law; the cited sources are the evidence for that. Estimate, not tax advice.

## For agents

- Model manifest (formula, constants, test vectors): https://valem.run/calculators/iceland/vat.json
- Compute by URL: https://valem.run/calculators/iceland/vat.json?amount=10000
- MCP: https://valem.run/mcp/calculators (call `calculate` with calculator `iceland/vat`)