The general VAT rate is 24%.
The reduced VAT rate – 11%
It applies to the sale of the following goods and services:
- Food and food sales.
- Music recordings
- Newspapers, magazines, and district newspapers.
- Condoms and reusable diapers.
Those who sell taxable goods without exceeding the threshold of 2,000,000 Icelandic crowns don’t have obligation to register for VAT.
VAT paid on the export of goods can be deducted.