Skatturinn - Iceland Revenue and Customs
Calculation of excise duty on imported vehicles
Excise duty is imposed on vehicles subject to registration when they are imported. This applies equally to both new and used vehicles.
No excise duty is charged on vehicles powered exclusively by electricity, methane or hydrogen.
Calculation
Excise duty is calculated based on the following:
The customs value of the vehicle, which consists of the purchase price, transport costs and transport insurance. Excise duty may range from 10% to 70% of the customs value.
The vehicle’s carbon dioxide (CO₂) emissions.
If CO₂ emissions are not stated in the vehicle’s registration certificate, the excise duty is calculated based on the vehicle’s weight.
To calculate the excise duty, information on emissions is required. This information can be found in the vehicle’s registration certificate and type approval documentation.
See the import charges calculator.
Vehicles partially or fully exempt from excise duty
Vehicle description | Excise duty |
|---|---|
Motor vehicles that are powered exclusively by methane, electricity, or hydrogen. | 0 % |
Vehicle description | Excise duty |
|---|---|
Passenger buses registered for 10 persons or more, including the driver, with a maximum authorized mass of 5 tonnes or more. | 0 % |
Passenger buses registered for 10 persons or more, including the driver, with a maximum authorized mass of 5 tonnes or less. The same vehicles, when owned by a tour operator or a licensed public transport operator, or held under a finance lease agreement with such an operator, are subject to 5% excise duty. | 40 % |
Vehicle description | Excise duty |
|---|---|
Motor vehicles designed for special purposes, such as tow trucks, crane trucks, and similar vehicles, which are not primarily designed for the transport of persons or goods and are not specified elsewhere, with a gross vehicle weight exceeding 5 tonnes. | 0 % |
Tractors in vehicle categories T1, T2 and T3 that are registered as tractors in the Vehicle Register and classified under tariff heading 8701 of the Customs Tariff. | 0 % |
Crane trucks and drilling crane trucks with a maximum authorised mass of 5 tonnes or less. | 20 % |
Bodies (including driver’s cabs) for motor vehicles. | 20 % |
Motor vehicles designed for special purposes, such as tow trucks and similar vehicles, which are not primarily designed for the transport of persons or goods and are not specified elsewhere, with a gross vehicle weight of 5 tonnes or less. | 20 % |
Vehicle description | Excise duty |
|---|---|
Tractor units for semi-trailers, primarily designed to tow another vehicle, with a gross vehicle weight exceeding 5 tonnes. | 0 % |
Motor vehicles in vehicle category N3, intended for the transport of goods, with a gross vehicle weight exceeding 12 tonnes and classified under tariff heading 8704 of the Customs Tariff. | 0 % |
Semi-trailers and full trailers for the transport of goods with a maximum authorized mass exceeding 5 tonnes. | 0 % |
Tractor units with a gross vehicle weight of 4 tonnes or more, designed for off-road use. | 0 % |
Self-loading or self-unloading semi-trailers and full trailers for agricultural use. | 0 % |
Semi-trailers and full trailers for the transport of goods with a maximum authorized mass of 5 tonnes or less, and other semi-trailers and full trailers. | 20 % |
Tractor units for semi-trailers, primarily designed to tow another vehicle, with a gross vehicle weight of 5 tonnes or less. | 20 % |
Vans with an integrated cab and cargo compartment, where applicable fitted with passenger seats or seat mountings for up to two passengers in addition to the driver in the cab, but with no such seats in the cargo area, intended for the transport of goods and with a maximum authorized mass of 5 tonnes or less. | 20 % |
Motor vehicles intended for the transport of goods, with a gross vehicle weight exceeding 5 tonnes but not exceeding 12 tonnes, and classified under tariff heading 8704 of the Customs Tariff. | 20 % |
Vehicle description | Excise duty |
|---|---|
Motorcycles as defined in the Traffic Act, as well as stepped motorcycles, quad bikes, six-wheeled vehicles, go-karts, golf carts, and tracked vehicles, including snowmobiles. | 40 % |
Vehicle description | Excise duty |
|---|---|
Fire engines and ambulances owned by the State, municipalities, or institutions operating on their behalf. | 0 % |
Vehicles owned by foreign embassies, consulates, and consular officers, where such exemption is required under international agreements to which Iceland is a party. The same applies to international organisations and international institutions operating in Iceland. | 0 % |
Vehicles owned by the State, municipalities, or institutions operating on their behalf, or by persons with disabilities, which are specially equipped for persons with disabilities. Such vehicles must be fitted with a wheelchair lift or similar equipment and approved by Icelandic Health Insurance (Sjúkratryggingar Íslands). | 0 % |
Vehicles intended for use by rescue teams, provided that confirmation has been issued by the national association of rescue teams stating that the vehicle will be used solely for rescue operations.” | 0 % |
Vehicle description | Excise duty |
|---|---|
Tracked vehicles (snow vehicles) with an unladen weight exceeding 700 kg, specifically designed for driving on snow. | 0 % |
Amphibious wheeled vehicles intended for use on land and water. | 0 % |
Vehicle description | Excise duty |
|---|---|
Chassis fitted with an engine and a driver’s cab, and where applicable with an added cargo area. An added cargo area refers to a cargo box or cargo platform that is not integrated with the driver’s cab and does not form a visual whole with it in terms of shape, color, or materials. | 20 % |
Other motor vehicles not specifically listed in this section. | 40 % |
Excise duty, up to a maximum of 500,000 ISK, shall be waived for:
custom-built vehicles for rally competition that are registered as such,
vehicles that are not subject to registration and are custom-built for use in drag racing (quarter-mile racing),
off-road chassis vehicles for use in off-road competitions.
Conditions for exemption
The exemption from excise duty is subject to the condition that, for the seven years following the initial registration of the vehicle, the following requirements are met:
The vehicle must be intended for and used exclusively in motor sport competitions held in accordance with the rules on motor sports and motor sport competitions and organised under the responsibility and rules of a recognised motor sport association, i.e. an organised association that includes motor sports among its activities and has received official recognition from the Ministry of Justice.
When applying for exemption from excise duty, a certificate from the vehicle manufacturer must be submitted, together with a reasoned statement from a recognized motor sport association confirming that the vehicle is a custom-built competition vehicle for the relevant motor sport discipline. If the vehicle is not subject to registration, a certificate to that effect must be submitted from the vehicle registration authority. In assessing whether a vehicle qualifies as a custom-built competition vehicle for the relevant discipline, consideration shall be given, among other things, to whether the vehicle meets the requirements set by the recognized motor sport association for competition vehicles. With regard to custom-built rally vehicles, it shall also be assessed whether the vehicle meets the requirements for registration under the Regulation on Vehicle Registration.
If the vehicle is a custom-built rally car, it must be registered as such in the Vehicle Register in accordance with the Regulation on Vehicle Registration. Registration numbers must comply with the provisions of the same Regulation.
Vehicles granted exemption under this Article are not permitted to be driven on public roads. However, custom-built rally vehicles may be driven on public roads for participation in rally competitions in accordance with the rules on motor sports and motor sport competitions, and for practice driving under the same rules.
If the above conditions are breached, Iceland Revenue and Customs shall collect the full excise duty, i.e. the difference between the excise duty paid and the amount that would have been payable if the exemption had not been granted.
A statutory lien shall rest on the vehicle for any unpaid excise duty.
It is possible to apply for a reduction or exemption from excise duty when importing a vehicle.
Calculation rules for excise duty on vehicles
CO₂ value
The way carbon dioxide emissions (CO₂ values) are recorded in the vehicle register varies between vehicles. When calculating excise duty, the available CO₂ value is used according to the following order of priority:
Weighted CO₂ value (measured according to the WLTP method), if available
CO₂ value (measured according to the WLTP method), if available
Weighted CO₂ value (measured according to the NEDC method), if available
CO₂ value (measured according to the NEDC method), if none of the above are available.
Calculation method
Types of excise duty calculated based on CO₂ values
Excise duties calculated based on CO₂ emissions are identified by the codes N1, N2 and N3. When calculating the duty, the applicable category is selected according to the vehicle’s registration details in the vehicle register.
Calculation of N1, N2 and N3 excise duties
The method for selecting and calculating N1, N2 and N3 excise duties is as follows:
Excise duty N1
0.34% for each gram of registered CO₂ emissions exceeding 15 grams per kilometer, where emissions are recorded only according to the European driving cycle (NEDC).Excise duty N2
0.34% for each gram of registered CO₂ emissions exceeding 30 grams per kilometer, where emissions are recorded only according to the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).Excise duty N3
0.34% for each gram of registered CO₂ emissions exceeding 30 grams per kilometer, where emissions are recorded according to both the WLTP method and the European driving cycle (NEDC).
However, the excise duty under N1, N2 and N3 can never exceed 70% of the vehicle’s customs value.