Shopping Tax-Free in Iceland

There are so many aspects of Iceland that you just have to be here for. The northern lights, the geysers, the spectacular waterfalls and fjords are all experiences you can only bring home as memories. But many of the Iceland’s sights and sounds and flavours can be brought home in the form of souvenirs and gifts. For those things you can bring home with you, Iceland offers an incentive for you to buy. Here’s how you can use the tax or VAT refund to make your dollar—or Króna—stretch further.

As an enticement for visitors to Iceland to buy Icelandic products to bring home, Iceland will refund the sales tax to visitors to the country on purchases over 6,000 Króna—that’s about $60 US. And the 14% sales tax is already in the ticket price, so when you’re shopping you know that part of that ticket price will come back to you. Let’s take an example from Icewear´s collection of hand-knitted sweaters for women. The Brynja crew-neck sweater costs 19,990 Icelandic Króna, of which 14% (about 2,798 Króna) is sales tax. That’s 2,798 Króna you can get refunded to you at the end of your time in Iceland, to be credited to you by whatever method of payment you used to purchase the sweater. Imagine how much you could save if you bought sweaters for the whole family!

Stamp on VAT Form at Customs Office

How do you get the tax refund on your purchases in Iceland? First of all, when you make your purchase, you will need to ensure that the store completes the official tax-free form and attaches your sales receipt to the form. If you are paying by credit card, your card information will need to be included as well. You will need this paperwork to claim your refund upon your departure from Iceland. Second, be sure to pack your purchases for easy access, either in your carry-on baggage or on top of everything else in your checked bags, in case you need to provide proof of purchase. Third, you must present your paperwork, and purchased items if requested, to the appropriate customs authority before departing from Iceland. If you are traveling by air, you will find the tax-free desk at Keflavík airport before checking in for your flight. If you are travelling by cruise ship, a customs officer will visit your ship; the ship’s crew will be able to advise you as to where and when to meet the customs officer. If you are taking a ferry from Seyðisfjörður, you will find the customs office inside the ferry terminal. Please note, if you are entitled to receive a refund of more than 5,000 Króna, your form will require an extra customs stamp—the customs official will handle this as well.

So go ahead and buy those gifts for your loved ones—and for yourself. Take home some tastes of Iceland from our seafood delicacies to our local beers to our chocolate. For those with artistic interests, our literature and music tap into something both ancient and futuristic. Whether it’s a classic lopapeysa sweater or a quirky gift like bottled Icelandic air, you’ll find lots you’ll want to pack into your suitcase to bring home. And as you receive your tax refund upon leaving Iceland, we hope you’ll feel the desire to come back again!