Is there a free VAT/GST threshold for foreign digital sellers?

Yes — ISK 2,000,000 (engine approximation). Proposed in

24% standard (11% reduced for some publications)

No. This page summarises official VAT/GST rules for foreign digital sellers. It is not tax or legal advice

Compendium · Europe · Iceland

Iceland: VSK on digital services

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Not supported by the free-threshold API · Local term: VSK

Last verified: 2026-10-29

Foreign sellers of electronic services to Icelandic consumers must register and charge Icelandic VAT once B2C sales exceed ISK 2,000,000 in any rolling 12 months. Simplified VOES registration (voes.rsk.is) does not require a fiscal representative and is unavailable if the seller has an Icelandic PE. Standard rate 24%; some digital publications/media may qualify for 11%

Not supported by the free-threshold API: why

Free-threshold row proposed in

Spot a mistake in Iceland’s rules?

Open a public correction issue on Gitea (sign in or create an account). The form is prefilled with this page’s URL and a short template, and asks for the correction label. Accepted corrections become a reviewed diff on the rules dataset — rule fixes belong in botchannels-app, not a silent change on this site.

Threshold and rates (VSK)

Free threshold?: Yes — Free-threshold row proposed in
Amount / measure: ISK 2,000,000
Registration when sales into the jurisdiction reach ISK 2,000,000. calendar year approximates rolling 12-month tests where applicable
Window: Calendar year
Standard rate: 24.0%
Standard VAT 24%. Reduced 11% may apply to certain books, newspapers, magazines and similar digital publications / broadcasting subscriptions per Skatturinn guidance
Who must register: Foreign suppliers of electronic services to non-taxable persons in Iceland above the threshold (VOES simplified scheme if no Icelandic PE)
Evidence of location: Customer in Iceland. Skatturinn/VOES materials; keep Icelandic billing address, IP and payment indicators. Fixed two-evidence EU-style checklist is not separately published for VOES in the English summary as of 2026-10-29
Invoicing: Charge applicable Icelandic VAT once registered under VOES
Filing: Per VOES / Skatturinn return schedule after registration. Not specified in official English guidance as of 2026-10-29 for a one-line deadline beyond registering on voes.rsk.is — follow portal instructions
Effective: VOES electronic-services VAT alignment with EU-style destination rules for Iceland
Authority: Skatturinn (Iceland Revenue and Customs)

What Botchannels returns

Ruleset version: 2026-10-22.v1
Decision summary: Botchannels does not open free-threshold sales here. Register (or appoint a representative) before selling.
Product class: Digital service
Support status: Not supported by the free-threshold API — Free-threshold row proposed in

How to register

Self-register online?: Yes — via VOES at https://voes.rsk.is/ when you have no Icelandic permanent establishment. No Icelandic fiscal representative is required under VOES
Resident representative / fiscal agent: Not required under VOES (Skatturinn English materials). Ordinary registration applies if you have an Icelandic PE
Regime: Iceland VOES (VAT on Electronic Services) for foreign suppliers above ISK 2,000,000 / 12 months

Steps (in order)

Confirm electronic services to Icelandic consumers and whether the ISK 2,000,000 / 12-month threshold is exceeded
Register at the VOES portal (unavailable if you have an Icelandic PE — use ordinary registration instead) — https://voes.rsk.is/
Provide company and supply details the portal requests
Charge 24% VAT (or 11% if the supply qualifies for the reduced rate); file and pay per VOES portal schedule

Documents

VOES online registration — Company / contact / website details
Evidence of no Icelandic PE — As implied by VOES eligibility

Official processing time: Skatturinn does not publish an English service-level time for VOES registration on the pages reviewed as of 2026-10-29
Official fees: No VOES registration fee summarised on English materials reviewed; adviser fees are commercial
Portal: https://voes.rsk.is/
Local bank account: Not specified as mandatory in official English guidance as of 2026-10-29
Filing frequency: Per VOES portal schedule after registration
Payment currency: ISK
Input VAT recovery: VOES remits output VAT; input recovery not the core path for non-established sellers
Portal language: English / Icelandic VOES materials
Penalties: Icelandic tax procedure penalties; confirm current amounts with Skatturinn

Firms offering this service

Non-exhaustive. Not an endorsement. Links checked live on 2026-10-29; confirm current offerings, licences, and fees directly with each firm before engaging

KPMG Iceland — Member firm
Deloitte Iceland — Member firm

Official sources

Skatturinn — VAT (English)
VOES portal

Last verified: 2026-10-29.

FAQ

Is there a free VAT/GST threshold for foreign digital sellers?: Yes — ISK 2,000,000 (engine approximation). Proposed in
Is a local tax representative mandatory?: Not under VOES
What rate applies?: 24% standard (11% reduced for some publications)
Is this tax advice?: No. This page summarises official VAT/GST rules for foreign digital sellers. It is not tax or legal advice