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Iceland TIN & Kennitala Guide — Format, Validation, VAT (VSK-nr)

Icelandic Identification Number (Kennitala)​

Iceland uses a single identification system — the kennitala — to identify both individuals and legal entities for tax and administrative purposes. Registers Iceland (Þjóðskrá) issues kennitalas to individuals; the company register at Skatturinn (Fyrirtækjaskrá) issues them to businesses. Every tax filing, payroll, invoice, and business contract in Iceland must reference the relevant kennitala.

Kennitala Format (10 Digits)​

The kennitala is always 10 digits and is displayed with a hyphen after the sixth digit: DDMMYY-RRRR.

PositionMeaning
D1 D2Day of birth (or registration date for entities)
M1 M2Month
Y1 Y2Year (last two digits)
R1 R2Random digits assigned at registration
CCheck digit (modulo-11)
MMillennium digit — 9 for 1900s, 0 for 2000s, 8 for 1800s

For legal entities, 4 is added to the first digit (D1) to prevent overlap with individual kennitalas. A company founded on 15 March 2003 would start with 550303.

Check digit formula:

C = 11 − ((3×D1 + 2×D2 + 7×M1 + 6×M2 + 5×Y1 + 4×Y2 + 3×R1 + 2×R2) mod 11)

Two critical edge cases: when the inner modulo equals 0, C = 0 (not 11); when it equals 1, the result would be 10 — a two-digit value — so the registry skips that R1/R2 combination and assigns new random digits until a valid single-digit checksum results.

VAT Number (VSK-nr / Virðisaukaskattsnúmer)​

Iceland's VAT identification number is called the VSK-nr (short for Virðisaukaskattsnúmer). Unlike many countries, Iceland does not use a separate VAT number: the company's kennitala is its VAT number. When used in international contexts the format is the ISO country prefix plus the kennitala digits: IS followed by the 10-digit kennitala (e.g., IS5012031230). Skatturinn assigns the VSK label upon VAT registration and sends a written confirmation.

VAT is called VSK (Virðisaukaskattur) in Icelandic. The standard rate is 24%; the reduced rate is 11%.

Official Lookup Tools​

VAT Registration Obligations​

Any business — domestic or foreign — that makes taxable supplies in Iceland must register for VSK once 12-month turnover exceeds ISK 2,000,000. Registration must be submitted no later than eight days before the business begins taxable activity. The VAT registration form is RSK 5.02.

Foreign companies without a permanent establishment in Iceland must also appoint an Iceland-resident fiscal representative who takes joint legal responsibility for VAT filings and remittances — unless they qualify for the simplified VOES registration (available only for B2C electronic services such as SaaS, streaming, and apps).

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Frequently Asked Questions​

Can a foreign national get a kennitala without having a registered address in Iceland first?​

This is a genuine catch-22 for new arrivals. A kennitala for individuals requires legal domicile registration at a confirmed physical address in Iceland, yet landlords and banks often demand a kennitala before signing a lease or opening an account. The practical workaround is the system ID number (utangarðskennitala): a temporary identifier issued to workers staying 3–6 months that looks identical to a kennitala but carries no rights (no health insurance, no social benefits). It does allow you to open a bank account while you secure permanent housing. EEA/EFTA citizens apply in person at Registers Iceland (Þjóðskrá); non-EEA nationals must have their employer or a sponsoring organisation submit the full kennitala application once a permanent address is confirmed. [1] [2]

Why does my kennitala validator reject a number that Skatturinn accepts as valid?​

The most common cause is a misimplemented modulo-11 check digit. The correct formula is C = 11 − ((3×D1 + 2×D2 + 7×M1 + 6×M2 + 5×Y1 + 4×Y2 + 3×R1 + 2×R2) mod 11). Two edge cases break naive implementations: (1) when the inner modulo equals 0, the check digit is 0 — not 11; (2) when the inner modulo equals 1, the result would be 10, which cannot occupy a single digit position — the Icelandic registry simply skips that R1/R2 combination and assigns new random digits until a valid checksum is produced. A validator that returns "invalid" for a remainder-0 number (treating it as 11) or crashes on a remainder-1 case is using a broken algorithm. The authoritative specification is published by the OECD. [3] [4]

When must a foreign company register for VAT (VSK) in Iceland, and is a local fiscal representative mandatory?​

Any business — domestic or foreign — that sells taxable goods or services in Iceland must register for VSK once 12-month turnover exceeds ISK 2,000,000. Upon crossing the threshold, registration is required within 8 days. Foreign companies without a permanent establishment in Iceland must appoint an Iceland-resident fiscal representative who takes joint legal responsibility for VAT filings and remittances. For companies supplying purely digital or electronic services B2C (e.g. SaaS, streaming, apps), Skatturinn offers a simplified VOES registration that does not require a fiscal representative — but it is available only for electronic services. Physical goods or on-site services still require the full registration with a local agent. The VAT registration form is RSK 5.02. [5] [6]

What does a foreign company need to register an Icelandic branch and receive its kennitala?​

A foreign branch is registered directly with Skatturinn's company register (Fyrirtækjaskrá) and receives its own kennitala upon approval. Required documents include: a company certificate for the parent (issued within 3 months of application), the parent's latest annual accounts, the articles of association, a mandate and power of attorney for the branch manager, and a beneficial-owner notification (form RSK 17.27). Critically, if the appointed branch manager does not already hold an Icelandic kennitala, an application for a system ID number and a passport copy must be submitted alongside the other documents — there is no workaround. All documents must be in Icelandic, English, Danish, Swedish, or Norwegian. Registration costs ISK 256,000 and typically takes 10–12 business days. [7] [8]

What withholding tax applies when an Icelandic company pays dividends or royalties to a non-resident, and how is treaty relief claimed?​

Iceland withholds 20% on dividends paid to non-resident companies (21% for income year 2024 only) and 22% on dividends paid to non-resident individuals. Royalties to non-residents are taxed at 22%; interest is withheld at 10%. Two relief routes exist: (1) EEA-resident companies that received dividends after 1 June 2008 can claim a full refund of withholding tax regardless of any treaty; (2) treaty-country residents can apply for a reduced or zero rate in advance using form RSK 5.42, or claim a refund of over-withheld tax after the fact using form RSK 5.43. Both forms require certification from the home-country tax authority confirming residence. Without submitting RSK 5.42 before payment, the payer is legally obliged to withhold at the full domestic rate. [9] [10]