Invoicing and Tax regulation in Iceland
Invoicing Regulation in Iceland
In Iceland, invoicing regulation is subject to strict rules. All invoices must clearly state the date, the quantity and type of items delivered or services performed, the price per unit, and any discounts. All invoices must be issued in Icelandic Kroner. Mandatory invoicing is a key requirement in Iceland for both B2B, B2C and B2G businesses.
Real-Time Reporting / Fiscalization in Iceland
In Iceland, real-time reporting and fiscalization are not currently required. Businesses do not have to submit their invoices in real-time to the tax authorities. However, businesses might have to maintain complete records of all transactions for auditing purposes.
E-Invoicing in Iceland
E-Invoicing in Iceland is becoming increasingly common, especially in B2B transactions. Electronic invoicing is not mandatory, but it's recommended for efficiency and convenience. The Icelandic Government encourages the use of e-invoicing for B2G transactions to reduce administrative burdens and increase workflow efficiency.
VAT/GST/Tax Compliance in Iceland
Complying with the VAT/GST/tax regulations in Iceland is mandatory. The standard VAT rate is 24%, and a reduced rate of 11% applies to certain goods and services. For B2B transactions, the reverse charge mechanism applies. B2C businesses must include VAT in the price of goods or services sold. For B2G, the government bodies must pay VAT, but they are often entitled to full VAT refunds. All businesses are required to register for VAT if their taxable turnover exceeds ISK 2,000,000.