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Iceland Tax Information

24% VSK

VSK (VAT) is 24% standard, 11% for hotels/books/food. No threshold - all businesses must register. Source: Icelandic Revenue and Customs.

Contractor Services to Invoice

  • Labor charges
  • Material costs
  • Equipment rental
  • Permit fees
  • Subcontractor work
  • Change orders
  • Warranty work

Invoice Requirements in Iceland

Kennitala
VSK number
Business address
Client kennitala
VSK breakdown
Total in ISK

Payment Terms

Progress billing at milestones. Retain 5-10% until final inspection.

Reiðufé14 dagar30 dagarGjalddagi

Payment Methods in Iceland

Bank TransferCredit CardCash

Contractor Invoice Tips

  • Break down materials and labor
  • Reference permits
  • Document change orders
  • Include lien waiver language
  • Track progress payments

Frequently Asked Questions

What tax rate applies to contractor invoices in Iceland?

Iceland has 24% VSK. VSK (VAT) is 24% standard, 11% for hotels/books/food. No threshold - all businesses must register. Source: Icelandic Revenue and Customs.

What payment methods are common for contractors in Iceland?

Common payment methods in Iceland include: Bank Transfer, Credit Card, Cash. Progress billing at milestones. Retain 5-10% until final inspection.

What should contractor invoices include in Iceland?

Your invoice should include: Kennitala, VSK number, Business address, Client kennitala. For contractor services specifically, also include: Labor charges, Material costs, Equipment rental.

How should contractors bill for projects?

Progress invoicing at milestones. Break down labor, materials, and subcontractor costs.

How do contractors handle material markup?

15-25% markup is standard. State policy in contracts.

What VSK rates apply?

Iceland has 24% standard VAT and 11% reduced rate for hotels, books, and some food. No zero-rated goods domestically.