Lodging tax

A lodging tax (IS: Gistináttaskattur) shall be collected on sales of accommodation/lodging tax units and payment thereof remitted to the Treasury.

A lodging tax unit is the sale of accommodation for up to one day, including overnight, i.e., a premise or area, including on board a cruise ship, that is rented out for the purpose of overnight stays, where sleeping facilities are available or can be arranged, and the rental is generally for a period of less than one month.

Amounts

From January 1. 2024 the lodging tax amounts are as follows:

600 kr./lodging tax unit - For hotels, guesthouses and so forth which have a license in categories II-IV, according to the Act on restaurants, lodging facilities, and entertainment.
300 kr./lodging tax unit - For camp sites and parking spots for motorhomes trailers, pop-up campers and caravan sites.
1.000 kr./lodging tax unit - For cruise ships, on accommodation aboard a cruise ship while it is docked in a harbor in Iceland or elsewhere in the customs territory of Iceland.

Invoices

Parties subject to lodging tax which are engaged in VAT-taxable activities must specify the lodging tax on their invoices or receipts. VAT is levied on lodging tax at the same rate as the accommodation.

Registration

Parties subject to lodging tax must send notification of their business activity to Iceland Revenue and Customs and register in the lodging tax register. To log in a taxable party must use the VAT-password issued to submit VAT reports.

Open registration

Reporting

Those liable for lodging tax must pay lodging tax for each accounting period based on the number of units sold. For VAT-taxable parties each settlement period is two months, January-February, March-April, May- June, July-August, September-October and November-December. The lodging tax along with a lodging tax return shall be turned in no later than on the fifth day of the second month following a settlement period for transactions during that period. Lodging tax reports are submitted electronically.

To log in, a taxable party must use the VAT-password issued to submit VAT reports.