Reimbursement of VAT to foreign enterprises
Foreign companies may apply for reimbursement for the value added tax that has been paid in Iceland when purchasing goods and services for their economic activities or importation of goods. The VAT of purchased goods and services for resale and/or final consumption in Iceland is not reimbursed.
The refunds are not intended to lead to double taxation or no taxation according to the Act on value added tax.
Definition of a foreign company
A foreign company is considered to be a party that engages in business operations and is not resident, domicile nor has a place of business in Iceland.
Some foreign companies operating in Iceland may have the right to a refund if the operations of the business establishment do not entail a registration obligation according to the VAT Act. Foreign companies registered as simple registrations (VOES) may also be entitled to a refund.
Supporting documents
Copies of sales invoices, copies of other income registration documents or payment documents from the customs authorities, indicating the value added tax paid by the applicant.
The documents on which the application for VAT refund is based must meet all the criteria regarding form and content in accordance with the Regulation on accounting and income registration.A certificate from the competent authorities of the applicant's country of domicile stating the nature of the business operations being pursued. A certificate of this type is valid for one year from the date of issue. A new certificate is not required on subsequent applications of reimbursement within the period of validity.
Other documents that the Directorate of Internal Revenue considers necessary to verify the amounts on the refund request.
Power of agency
A foreign company may entrust its representative with applying for and receiving on its behalf the refund of value added tax, provided that the company has unambiguously given its representative a written mandate in this regard.
Attached to the form shall be copies of passports or other personal documents of that person.
Service provider
Iceland Revenue and Customs