Visitors who are permanently resident outside Iceland can reclaim VAT on qualifying purchases bought in Iceland. The standard VAT rate is 24 percent, the reduced rate is 11 percent, and goods bought under the scheme must be exported within 3 months of the purchase date.
Who qualifies for tax-free shopping in Iceland
Iceland’s tax-free shopping scheme is for visitors who are permanently resident outside Iceland. Residents of Iceland are not eligible for the refund.
As proof of residence outside Iceland, the purchaser must show a passport or other ID that clearly shows permanent residence in another country.
VAT rates and the minimum purchase to qualify
The standard VAT rate in Iceland is 24 percent, and it applies to most goods. Iceland also has a reduced VAT rate of 11 percent, which applies to categories including food and accommodation rather than most retail goods.
To qualify for a refund, the amount on a single purchase receipt, VAT included, must meet the minimum qualifying purchase. The goods must then be exported out of Iceland within 3 months of the purchase date.
Getting your tax-free form in the shop
At the time of purchase, the buyer asks the store for a tax-free form. The store fills in the form and attaches the original purchase receipt to it.
Validating the form and getting paid when you leave
Before any refund is paid, the form must be export validated. That means it needs a stamp from customs or an approved refund operator.
At Keflavik Airport, forms for refund amounts under the minimum qualifying amount are stamped at the tax refund or currency exchange desk. Forms for refund amounts over the minimum qualifying amount need a customs stamp instead.
At validation, the purchased goods must be presented together with the completed form and the receipt.
Once the form has been export validated, the refund is paid by the tax-free company that processes the claim, separately from customs. The amount paid out is lower than the full VAT included in the price because the refund operator deducts a service fee, and the amount kept varies by operator and by the size of the claim.
Estimate your refund before you fly
Estimate your refund with the tax-free refund calculator.
Tax-free refund vs. the arrival duty-free allowance
The duty-free calculator covers a separate scheme, the duty-free allowance for alcohol, tobacco, and other goods that arriving passengers bring into Iceland, not the departure VAT refund on goods bought in Iceland.
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