You can apply for a reduction or exemption from excise duty for certain vehicles. The application must be submitted before the vehicle is first registered, or in direct connection with the first registration.
Your customs broker can assist with the application process.
Eligible vehicles
Custom-built vehicles for competitive motorsport.
Vehicles specially equipped for search and rescue squad operations.
Specially modified vehicles for people with disabilities.
Specially equipped vehicles for commercial passenger transport.
More about which vehicles qualify for excise duty exemptions.
Conditions on use
A reduction or exemption from excise duty is subject to conditions regarding the use of the vehicle for a specified period. If the use of the vehicle changes during that period, part of the excise duty must be repaid.
Leasing companies
If the registered owner is a leasing company, it must also sign a declaration confirming that it is aware of the applicable conditions and the statutory lien. If the company intends to benefit from the excise duty reduction, it must confirm that it will repay part of the duty if the vehicle is used for purposes other than those originally specified.
Application Process
Vehicle owners eligible for the reduction or exemption must submit an application prior to or upon the vehicle's initial registration.
Fill out the application (TS-V04). For imported vehicles, a customs broker can assist with the process.
Attach applicable supporting documents like:
Taxi operating permit.
Driving school operating license and instructor certification.
Statement from a recognized motorsport association.
Confirmation from national search and rescue associations.
Review from Icelandic Healthfor disability-adapted vehicles.
Confirmation from the Icelandic Transport Authority for specialized tourism vehicles.
If the vehicle is leased, the leasing company must sign a declaration agreeing to pay the remaining excise duty if the vehicle's usage changes.
Email the application and supporting documents to: skjalabeidni@skatturinn.is. If applying during import, submit the form alongside the customs declaration in the customs system.
Applications for tax exemption or reduction cannot be made after the vehicle has been registered.
Change of use or sale of the vehicle
Before selling the vehicle or changing its use, any outstanding excise duty must be settled. The amount payable depends on how long the vehicle has been used for the purpose for which the reduced duty was granted.
A change of ownership cannot be registered until the remaining excise duty has been paid.
Laws and Regulations
Regulation on Excise Duty on Vehicles No. 331/2000
Service provider
Skatturinn - Iceland Revenue and Customs