Iceland cuts fuel VAT to 11% for the summer
- Jurisdiction
- Iceland
- Tax
- VAT
- Change type
- Rate change
- Status
- In force
- Announced
- 10 April 2026
- Effective
- 1 May 2026
- Authority
- Skatturinn (Iceland Revenue and Customs)
- Verified
- Corroborated against official id · high confidence
Icelandic fuel retailers, 1 May to 31 August 2026. The pass-through is not optional: retailers are legally required to hand the full reduction to consumers, and 24% resumes on 1 September.
Iceland temporarily reduced the VAT rate on petrol and diesel from 24% to 11% for the period 1 May to 31 August 2026, announced by the Prime Minister Office on 10 April 2026; fuel retailers are legally required to pass the full reduction to consumers. The standard 24% rate resumes 1 September 2026.
What changed in detail
Iceland temporarily reduced the VAT rate on petrol and diesel from 24% to 11% for the period 1 May to 31 August 2026, announced by the Prime Minister Office on 10 April 2026; fuel retailers are legally required to pass the full reduction to consumers. The standard 24% rate resumes 1 September 2026.
Proof
Standard rate Reduced rate VAT rates 24% 11% VAT calculated from total price (price includes VAT) 19.35% 9.91% Payroll tax Capital gains tax Icelandic National Broadcasting Service fee (útvarpsgjald) The Senior Citizen's Construction Fund fee Per diem payments for domestic travel Per diem payments for international travel Car allowance
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