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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.

Freelancer Services to Invoice

  • Hourly consulting
  • Project-based work
  • Retainer agreements
  • Milestone billing
  • Rush/priority fees

Invoice Requirements in Iceland

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

Payment Terms

Net 14 or Net 30 is standard. Consider 25-50% deposits for larger projects.

Reiðufé14 dagar30 dagarGjalddagi

Payment Methods in Iceland

Bank TransferCredit CardCash

Freelancer Invoice Tips

  • Always use a unique invoice number
  • Clearly state payment terms upfront
  • Include detailed breakdown of work
  • Add late payment fees
  • Keep copies for tax purposes

Frequently Asked Questions

What tax rate applies to freelancer 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 freelancers in Iceland?

Common payment methods in Iceland include: Bank Transfer, Credit Card, Cash. Net 14 or Net 30 is standard. Consider 25-50% deposits for larger projects.

What should freelancer invoices include in Iceland?

Your invoice should include: Kennitala, VSK number, Business address, Client kennitala. For freelancer services specifically, also include: Hourly consulting, Project-based work, Retainer agreements.

How do I invoice for hourly freelance work?

List each task with hours worked and hourly rate. Include dates and detailed descriptions.

Should I charge a deposit as a freelancer?

Yes, especially for larger projects. A 25-50% deposit protects you from non-payment.

What VSK rates apply?

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