If a foreign company selling taxable services in Iceland does not have a permanent establishment in Iceland, it must entrust an agent domiciled in Iceland to serve as its representative, including sending notification of its activities to the RSK (Directorate of Internal Revenue), collecting VAT on taxable services and remitting it to the Treasury. The foreign taxable company and its representative are both responsible for the collection and payment of VAT. It is not necessary for the payment from an Icelandic customer to be made through the foreign company’s representative in Iceland. Payment may be made directly to the foreign business.
Registration is not required when the buyer is registered according to Art. 5 of the VAT Act and can account for the VAT on the electronically supplied services as part of the input tax (B2B).