Registration to the employers register and/or VAT register

Value Added Tax Register

Application for a VAT-number

The VAT-compliant business shall notify Skatturinn - Iceland Revenue and Customs no later than eight days before the operation begins. The notification can be submitted electronically.

Skatturinn - Revenue and Customs assigns a VAT number (VSK-númer) and sends a confirmation of registration.

Note that a person or entity that registers in the VAT register is also generally required to register in the employers register.

Login to a service website is made with electronic IDs from individuals or company proxies. You can also use a website for login.

Registration on the Employer Register

You must notify the start of business operations to the Employer Register at least 8 days before activities begin. Employers are required to withhold income tax from wages they pay and from their own calculated wages.

Self-employed individuals

Individuals who run a business under their own ID number must calculate wages for themselves according to special rules on deemed salary and pay withholding tax on it. If a spouse and/or children work in the business, deemed salary must also be calculated for them, with withholding tax deducted in the same way as for other employees. The estimated monthly deemed salary must be reported to the Employer Register at registration.

If the business is very small and the deemed salary is less than ISK 450,000 per year, no withholding tax needs to be paid. These wages are only reported on the annual tax return and wage report. Income tax, municipal tax, and the social security contribution are then assessed at settlement.

If wages and deemed salary together do not exceed ISK 504,000 per year, withholding tax and the social security contribution are only paid once a year. See more about payment periods on the page Social Security Contribution.