There is a VAT registration threshold for foreign companies providing taxable goods or services in Iceland. This is currently ISK 2 million annual turnover – calculated on a calendar basis. Businesses may apply for a voluntary VAT registration.
Foreign businesses surpassing this limit should register within eight days of passing this threshold and appoint a local VAT representative. This party is responsible for the submission of correct filings on behalf of the foreign tax payer.
Non-resident businesses may not apply for group VAT registrations.
VAT number applications may be applied for using form RSK 5.02. A scanned copy may then be emailed to the Director of Internal Revenue.
Documents required for a foreign company’s registrations include:
Businesses may deregister if they fall below the annual registration threshold.
Once VAT registered, businesses will receive a unique 5-digit VAT number, to be added to all tax invoices.
Upon receiving a VAT number, businesses must levy, report and pay VAT charged on their taxable supplies.
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