Iceland set to triple VAT on accommodation

Discussion in 'Europe' started by sobore, Sep 7, 2012.  |  Print Topic

  1. sobore
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    sobore Gold Member

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    The Icelandic government has published proposals to raise the value added tax (VAT) on accommodation, restaurant meals and attractions from seven per cent to 25.5 per cent as of the May 1st 2013.

    This proposal more than trebles the tax on all those services that tourists need to purchase.
    Two-thirds of Iceland’s population live in Reykjavik, so hotel use is dominated by visitors: 90 per cent of hotel rooms in July 2012 were occupied by foreigners.

    This tax is aimed directly at an export market.
    The inbound tourism industry has been one of Iceland’s success stories over the last fifteen years.
    Foreign arrivals in 1997 were 210,000, in 2011 they were 598,000.

    A lot of this growth is recent: 2012 is set to match 2011’s annual increase of more than 16 per cent growth in foreign visitor arrivals.

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  2. SC Flier
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    SC Flier Gold Member

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    Hotels, food, and attractions to cost 17.2% more than current total price starting on May 1, 2013.

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