Cruise Operators in Iceland Must Register and Collect VAT for Domestic Voyages

• Cruise ships operating domestically in Iceland are subject to VAT
• Operators must register with the tax authorities and collect VAT on services provided during domestic cruises
• This applies to both domestic and foreign operators
• A defining letter 2/2025 has been issued and is available in English
• Domestic cruises involve taking passengers on board in Iceland, sailing between Icelandic ports, and returning them to land in Iceland
• VAT must be collected on all sales of goods and services during domestic cruises, including passenger transport, accommodation, food and drink sales, spa services, entertainment, day trips, and onboard product sales
• The list of taxable services is not exhaustive
• Foreign operators without a permanent establishment in Iceland must appoint a representative residing in Iceland
• The representative registers the operation on behalf of the operator, and both share responsibility for VAT returns and payments

Source: skatturinn.is

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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