Intermediation in the sale, agency sales, managed sales, or resale of goods and services that are subject to the 24% VAT rate is also subject to VAT at the same rate.

Examples in this context include the sale of souvenirs, intermediation in the rental of facilities for catering or renting such facilities in one’s own name, rental of vehicles or other movable property (e.g. ATVs and snowmobiles) without an operator—i.e. when the rental is not part of an organized tour under the guidance of a tour leader, cf. Section 2.1.

Intermediation in sales or delivery, including commissions for agency and management sales, and resale of goods and services subject to VAT at the 11% rate, as well as intermediation in the sale or delivery of exempt services, are subject to VAT at the 11% rate.

Examples of activities falling under this category include intermediation in the sale or sale in one’s own name of accommodation services, catering services, taxable passenger transport, and intermediation in the sale of fishing permits in rivers and lakes, as well as access to museums, concerts, and sporting events.

Services provided by travel agencies and tour operators, in so far as they relate on the one hand to international passenger transport—such as the sale of package holidays or business trips—and on the other hand to goods or services that the traveler uses outside Iceland, are not considered taxable turnover; i.e., such sales are effectively zero-rated.

No output VAT is therefore charged on these transactions, but the right to deduct input VAT remains.

Even if a travel agency or tour operator exclusively carries out such activities, they are nevertheless required to notify the tax authorities (Skatturinn) of their operations for VAT registration, cf. Chapter 7.

If travel agencies or tour operators engage in the purchase and resale, agency sales, or managed sales of services that are exempt from VAT, such sales are also exempt from VAT for example, the sale of fishing permits for rivers and lakes and the sale of admission to museums, concerts, and sporting events.

However, intermediation of exempt services is subject to VAT at the 11% rate, as stated above.

If a travel agency or tour operator carries out activities other than those described above, such activities are subject to VAT at the 24% rate unless they are specifically included under the 11% rate or are exempt from VAT.