Tax-Free Shopping in Iceland

Shopping in Iceland is never going to be a bargain. A good wool sweater or a 66°North jacket costs real money. But if you live outside Iceland, you can claim back part of the VAT on goods you take home, and on a big purchase that adds up. The rules changed a lot since I first wrote this page, so here's how it works in 2026.

How much VAT you can get back

Iceland's standard VAT rate is 24%, and the reduced rate of 11% covers things like food, hotel rooms and alcohol. VAT is always included in the price on the tag. That means the tax makes up 19.35% of what you pay for standard-rate goods, and 9.91% for reduced-rate goods.

You won't see all of that 19.35% again. The refund companies take a fee, so the cash you get back is less than the tax you paid. Iceland Tax Free says visitors get up to 14% back. Your Tax Free form shows the amount you'll get.

Who qualifies

According to Skatturinn, the Icelandic tax authority, and Keflavík Airport, you can claim if all of these are true:

• You live permanently outside Iceland. Bring your passport or another ID that shows it. Foreigners who live in Iceland can't claim.
• A single receipt totals at least 12,000 ISK, VAT included. Items under that amount count as long as the whole receipt reaches it. You can't add up several receipts to reach the minimum.
• You take the goods out of the country within three months of buying them.
• You show the goods, unused, with the Tax Free form and the original receipt when you leave.

Refunds are for goods you carry home. Services like restaurant meals, tours and hotel stays don't qualify, and not every shop takes part, so ask before you pay.

Step by step

1. Ask for a Tax Free form when you pay. The shop fills it in, signs it, and attaches the original receipt. No form, no refund.
2. Keep your purchases in your carry-on or unpacked. You'll need to show them before you check your bags.
3. At Keflavík Airport, go to the refund desk before check-in. The tax refund service is run by Prosegur Change in the arrivals hall, across from the car rental desks. They stamp (export-validate) forms where the refund is under 100,000 ISK and pay out the refund.
4. Refund over 100,000 ISK? Your form needs a customs stamp instead. At Keflavík the customs office is also in the arrivals hall, across from the car rentals.

Every form has to be stamped, whatever the amount. The official rules no longer carve out wool goods the way they did when I first wrote this.

Refund desk hours at Keflavík

As of 2026, the tax refund counter is open 4:30am to 10pm in summer (May 1 to September 30) and 4:30am to 8pm in winter (October 1 to April 30). When it's closed, the Prosegur Change currency exchange counter handles tax free instead. Leave yourself extra time, since you have to do this before you join the check-in line.

Heads up: Keflavík Airport is on the Reykjanes peninsula, where the Sundhnúkur crater row near Grindavík erupted nine times between December 2023 and August 2025. The airport has kept running, but the Icelandic Met Office says magma is still building up, so check safetravel.is for current conditions before your drive. Our page on getting from Reykjavik to Keflavik covers the transfer.

Leaving by ferry, cruise ship or private plane

If you leave on the ferry from Seyðisfjörður, customs is at the ferry terminal. On cruise ships, sailboats and private aircraft, customs officers come on board for clearance before departure, by appointment with the captain. See ferries to Iceland and cruises in Iceland for more on those routes.

Which refund company?

Shops work with different tax free operators, and the name on your form tells you which one. Iceland Tax Free is one of the main ones. Their rules match the official ones: 12,000 ISK minimum, original receipt attached, goods out of the country within three months, and claim before you check in. Skatturinn also points shoppers to Global Blue, whose Iceland page lists the same 12,000 ISK minimum and says to get your form validated by customs or its agent at Keflavik before you leave.

What's worth buying

The 12,000 ISK minimum rules out most small souvenirs, so tax free shopping pays off on bigger items: a hand-knit lopapeysa, outdoor gear, design pieces or jewelry. Buy the sweater and a hat in the same shop on the same receipt and you're more likely to clear the bar. For ideas, see souvenirs to buy in Iceland, shopping in Reykjavik, and the Kolaportið weekend market.

FAQ

Can I claim tax back on my hotel or tours?

No. The refund only covers goods you take out of the country. Services, including accommodation, restaurants and tours, don't qualify. For keeping those costs down, see how to budget for a trip to Iceland.

I packed my purchases in my checked bag. Can I still claim?

The refund agent needs to see the goods before they're stamped, and Keflavík Airport says to claim before you check in. Keep them handy until you've been to the refund desk.

Can I combine receipts from different shops?

No. The 12,000 ISK minimum applies to a single receipt.

Photo by coreythrace