Yes. In Iceland, the displayed consumer price is the final price, and the VAT already inside that price is typically 24 percent or 11 percent depending on the category. That means the amount shown to a consumer already includes charges such as commission, booking fee, freight, or any other payment regardless of its title.
The rule: the price you see is the price you pay
Under Icelandic price-marking rules, the price stated to a consumer must be correct and final. Value added tax, commission, booking fee, freight, and any other kind of payment regardless of its title must already be included in that price.
How shops and service businesses must display that price
All goods in shops and in display windows in Iceland must be clearly labelled with the final price, either on the product itself or next to it. Service businesses, such as salons and tradespeople, must keep a clear price list or sign showing the price of the services they provide, with price information at the cash desk or another prominent place where the service is given.
The VAT rates already folded into every price
Iceland's standard value added tax rate is 24 percent, applied to most goods and services. Iceland's reduced value added tax rate is 11 percent, which applies to categories including catering and the sale of food.
Why staff wages are not built around extra payments
Minimum pay and other employment terms in Iceland are set by collective wage agreements negotiated between unions and employer groups, covering the large majority of the workforce, rather than by a single statutory minimum wage or a tipped minimum wage. Under Icelandic law, employers and employees may not agree to lower wages or worse employment terms than those set out in the applicable collective wage agreement.
See what this means for tipping specifically
For the same price-inclusive logic in practical form, see the tipping calculator, which explains why tipping is not expected in Iceland across different services.
Check a specific purchase against these rates
To estimate a refund on qualifying goods when leaving Iceland, use the tax-free refund tool.
Comparing Reykjavik tours
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