There have been developments regarding VAT on domestic cruises in Iceland.

Important Deadline

If operators of cruise ships do not register in the VAT register for voyages sold in 2026 by April 1, they may expect the Director of Internal Revenue assess VAT based on the activities they have carried out.

Memorandum

AECO engaged legal counsel in January to prepare a memo on this issue. The memo includes, among its recommendations, consideration of a VAT exemption in line with the existing customs exemption.

Click here to find the memorandum (Icelandic), along with an unofficial translation summarizing key aspects of the VAT rules applicable to cruise operators in Iceland.