What is Tax Free?

When you shop Tax Free, it means that you are getting the VAT (Value Added Tax) deducted from the purchase price. The tax is used for social purposes in Iceland and as a foreign resident you can claim this tax back and hence, shop Tax Free.

Three golden rules for Tax Free shopping in Iceland
-You must have a permanent address outside of Iceland
-Shop for ISK 4.000.- or more
-Export the goods within three months from date of purchase.

How high is the VAT rate in Iceland?
It is 25,5% or 7% on special goods. It means that all prices include a VAT rate which hence corresponds to 20,32% or 6,54% of the total selling price.

Example: Price of good including VAT is 124,5 kr.
The VAT is calculated 124,5 * 20,32% = 25,3 kr.

Minimum amount when shopping Tax-free in Iceland?
In Iceland the minimum amount is kr.4.000.-

Can I use the refund system for all my expenses?
No, you can only use it for goods you will take with you out of the country. Services are hence not included, nor does food which you consume during your stay.

Can everyone shop Tax Free in Iceland?
Yes, everyone with a permanent address abroad can shop Tax Free