Last year, we reported that in keeping with the destination principle, Iceland had made changes to the VAT treatment applicable to certain acquisitions of cross-border services effective from 1st January 2019. The effect of this has been that certain foreign suppliers have now become liable to register for Icelandic VAT.
Further to this development, as of 1st July of this year non-resident businesses selling the supplies listed below may VAT-register in Iceland via either the general registration scheme; or a new simplified registration scheme. This will negate the existing need to appoint a fiscal representative.
The schemes may only be used by foreign companies selling business-to consumer (B2C) supplies of:
- Telecommunications, broadcasting and electronically supplied services, that are subject to Icelandic VAT;
- Printed newspaper and magazine subscriptions; and
- Services subject to Icelandic VAT provided by tourism businesses.
This measure is anticipated to make the Icelandic VAT registration procedure for impacted foreign companies faster and more business-friendly.
If you would like further information on how this development affects you, please do get in touch with us.