Wine, Gas, and Swimming Pool Prices Rise

Laugardalslaug geothermal swimming pool in Reykjavík

With the new year, changes to public price structures all over Iceland come into effect. Municipalities have upped the fees for some of the services they offer, while the 2024 budget, recently approved by Alþingi, heralds new taxes and adjustments to the existing ones.

Tax rates on alcohol and tobacco go up by 3.5 percent, Morgunblaðið reports. As does the licensing fee for public broadcasting and the tax on gasoline. The litre will cost an extra ISK 4.20 [$0.03, €0.03], while the litre of diesel goes up by ISK 3.70 [$0.03, €0.02]. The vehicle tax on lighter automobiles rises by 30 percent as well, while owners of electric cars will need to pay a new fee per kilometre, which for the average driver will amount to ISK 90,000 [$666, €599] per year.

Trash and tickets pricier

Municipalities have also announced higher prices for trash collection, as a new system for sorting refuse is being implemented in the capital area. The biggest increase is in Reykjavík, where the price for two bins goes from ISK 52,600 [$389, €350] to ISK 73,500 [$544, €489]. The highest fee remains in the more affluent neighbouring municipality of Seltjarnarnes and amounts to ISK 75,000 [$555, €499].

In Reykjavík, the prices for trips to the swimming pool, museum tickets and petting zoo admissions have also gone up. A single adult ticket to a public pool goes up by 6 percent and will now cost ISK 1,330 [$10, €9]. Yearly tickets go up by 5.5 percent, while prices for towel and swimming trunk rentals also rise. A hike in bus fare prices has also been announced. They will rise by an average of 11 percent.

New Year, New Fees: Important Changes in 2023

hallgrímskirkja reykjavík

With the new year, several new regulations, taxes, and fees are coming into effect. Here, we break down the most significant changes for the nation and capital region in 2023.

New Fees on Fuel, Alcohol

In line with the 2023 budget, the alcohol tariff is set to rise some 7.7.%. The price hike will also disproportionately affect alcohol sold in Duty Free, which was taxed at 10% last year, but will now be taxed at 25%.

Fuel is likewise increasing in price. In order to fund infrastructure, the general cost of car ownership is rising significantly. A litre of petrol is set to increase by ISK 16 (0.11 USD, 0.11 EUR), and import duties on electric vehicles are also increasing.

Schools and Pools

In line with the expected 4.9% cost of living increase throughout Reykjavík, the price for admission to the city’s pools will also be increasing, from ISK 1,150 (8.10 USD, 7.58 EUR) to ISK 1,1210 (8.52 USD, 7.98 EUR). Children’s prices are increasing by similar amounts, although residents can still save significantly with pool passes.

The cost of preschool registration will also be rising on average from ISK 33,570 (236 USD, 221 EUR) to ISK 35,215 (248 USD, 232 EUR).

Changes in Recycling

Changes are also coming to waste management and recycling in the capital area.

Icelanders will now need to sort their trash into four bins, and recyclables will no longer be tolerated in the black bin (for trash). Bins will now be sorted into paper, plastic, organic waste, and mixed waste.

Alongside these changes come increases in cost, with garbage removal fees in Reykjavík increasing by 20%.

Read more about coming changes in the 2023 budget here.


Car Taxes and Fees to Rise in Iceland

driving in reykjavík

The cost of owning a car in Iceland will rise significantly next year, if the 2023 budget bill is passed in its current form. The bill proposes hikes in gasoline and emissions taxes as well as the general vehicle tax. A new tax will be imposed on electric cars and new road tolls will also be implemented. The green energy transition will require the Icelandic government to restructure how it taxes vehicles and fuel, the main source of funding for road and transport infrastructure.

“Goes way too far”

The hikes in fees and taxes represent a 36% increase in revenue from vehicles for the state, according to Rúnólfur Ólafsson, chairman of the Icelandic Automobile Association (FÍB). “And then this comes with new taxes on both petrol and diesel,” Rúnólfur told RÚV. “This is happening at the same time as the Minister of Infrastructure is talking about greatly increased new taxation of public use of vehicles with so-called road tolls in tunnels, over bridges, and so on.”

Public transport infrastructure is limited in Iceland, meaning that the majority of the population relies on private vehicles to access employment and services. Rúnólfur says the additional costs will hurt the most vulnerable sectors of the population. “These are hugely increased charges that are being announced in one fell swoop, and we believe that this goes way too far as it is being proposed now.”

Cost of electric vehicles to rise

The government also proposes applying a 5% minimum excise duty on all cars, meaning that a full discount will no longer be applied to electric cars. While Finance Minister Bjarni Benediktsson stated there will continue to be strong incentives to buy environmentally friendly cars, FÍB calculates that the excise duty and value-added tax will raise the cost of electric cars by ISK 300,000 [$2,150; €2,150], though the rise could be as much as ISK 1 million for some cars [$7,160; €7,160].

Iceland funds the maintenance and development of roads and infrastructure through taxation on vehicles and fuel. A notice on the budget bill states the restructuring of this taxation will be one of the biggest challenges for the treasury in the coming years.

Government Approves Measures to Counteract Inflation, Overheating Economy

Minister of Finance Bjarni Benediktsson

In lieu of raising interest rates, the government will be implementing various measures intended to counteract inflation and an overheating economy as well as reducing the treasury deficit. Vísir reports that among the changes proposed by Minister of Finance Bjarni Benediktsson are a reduction to discounts on alcohol and tobacco products sold in airport Duty Free stores and the introduction of tariffs that will offset the current lack of revenue from vehicle and fuel taxation.

The scope of the proposed measures is roughly 0.7% of the GDP, or ISK 26 billion [$1.98 million; €1.88 million]. This amount should hopefully put the treasury in good stead to decrease the deficit without needing to increase interest rates. The proposals will be elaborated in full in the 2023 budget proposal.

Measures intended to increase the state’s revenue

One of the biggest changes is the introduction of tariffs that are meant to offset revenue that the government has lost from vehicle and fuel taxation. This drop in revenue is attributed in part to an increase in environmentally friendly cars. As more environmentally friendly cars become the norm, it is expected that the revenue streams that the government used to enjoy from gasoline and vehicle taxes will continue to decline. As such, a simpler and more efficient revenue collection system is being developed, which corresponds to the need for continued governmental expenditure on new construction, maintenance, and operation of Icelandic roadways.

Another major change will be a reduction in the tax discount on alcohol and tobacco products in Duty Free stores. Both are currently tax-free (in specific, limited quantities) when purchased, for instance, at the Keflavík airport upon entering or exiting the country. There will be a new diversion airport fee and the structure and scope of aquaculture-related VAT will be under review as well.

Measures intended to cut state costs

Current reductions of state-related travel expenses are to be made permanent. The leeway that exists for expenditures in the current budget will be suspended and leeway for general expenditures in policy-related areas will be almost cut in half. There will also be a reduction in contributions to political organizations.

Sigur Rós Charged with Tax Fraud

sígur rós tax case

Four members of experimental rock band Sigur Rós have been charged with tax evasion, RÚV reports. Georg Holm, Kjartan Sveinsson, Orri Páll Dýrason, and frontman Jón Þór Birgisson (‘Jónsi’) have been charged with failing to correctly declare income and dividends.

All of the band members except Kjartan Sveinsson are charged with major tax fraud by having submitted fundamentally incorrect tax returns from 2011 through 2014. Kjartan is charged with having submitted incorrect tax returns for the years 2012 and 2014.

Jónsi is accused of having evaded income taxes amounting to ISK 30 million [$245,059; €218,248] and capital gains tax of up to ISK 13 million [$106,184; €94,567]. According to his indictment, he failed to declare ISK 75 million [$612,498; €545,515] in income and dividends of ISK 67 million [$547,299; €545,515]. The auditor reviewing Sigur Rós’s tax returns also indicated that Jónsi did not correctly file his tax returns for 2014 and 2015 and in so doing, evaded income tax of as much as ISK 22.6 million [$184,566; €164,383] and capital gains tax of up to ISK 10 million [$81,673; €72,737].

Georg Holm, the band’s bassist, is charged with evading income tax of up to ISK 35 million [$285,880; € 254,550] and capital gains tax of ISK 9.5 million [$77,596; €69,093]. According to the charges, Georg’s income during the period covered by the indictment was ISK 79 million [$645,532; € 574,824], with dividends of ISK 47 million [$383,896; €341,984].

Kjartan Sveinsson, who left the band six years ago, is accused of having evaded income tax of ISK 18 million [$147,035; €130,913] on an alleged income of ISK 42 million [$343,056; €305,433].

Orri Páll Dýrason, who left the band in October amidst sexual assault allegations, is charged with having evaded income tax of ISK 36 million [$294,094; €261,823] and capital gains tax of up to ISK 9.5 million [$77,602; €69,092]. During the time period in question, Orri Páll had an income of ISK 81 million [$661,660; €589,099, with dividends of as much as ISK 47 million [$383,957; €341,835].

No court date has yet been set for the band members, but while the case is pending trial, their assets have been frozen. The majority of these assets belong to Jónsi, who currently resides in Los Angeles, California, in the US.

Throughout the audit, the band members have maintained their innocence and said that they had, in good faith, left their financial affairs in the hands of experts hired to handle their taxes and financial management. Their lawyer, Bjarnfreður Ólafsson, echoed this in a statement, saying “The members of Sigur Rós are musicians – not experts on bookkeeping and international finance.”


Unions Express ‘Anger and Disappointment’ Over Government’s Newly Proposed Tax Plan

Last night, Minister of Finance and Economic Affairs Bjarni Benediktsson presented the government’s proposals regarding tax and wage issues that have been under negation with four of Iceland’s labour unions and the Confederation of Icelandic Enterprise (SA). RÚV reports that while Bjarni laid out the proposals for the public during a live new conference on Tuesday evening, earlier that day, he had presented these to the unions in a private meeting. The union chairs were, however, unimpressed by the government’s proposals: “It was hoped that the government’s involvement could rekindle the discussion,” read a statement co-signed by the chairs of each union. “But it’s clear from the government’s proposals that this hope will come to nothing.”

The government’s contribution to the debate involved a significant change to the Icelandic tax system wherein the lowest tax level would be newly set at a monthly wage of ISK 325,000 [$2,718; €2,395] a month. The taxation on this level would be 32.94%.  The tax-free limit would be set at ISK 159.174 a month, taking into account a 4% pension contribution.

Bjarni’s presentation explained that the limit for both the first and second tax levels would be ISK 325,000 in order to maximize, he said, the benefits for low-income groups, as well as people with disabilities and the elderly. Per the second level, however, those who earn less than ISK 927,087 [$7,746; €6,830] a month would be taxed at 36.94% while those who make more than that would be taxed at 46.24%.

Bjarni said that on average, taxes would go down more for women than men, and also among individuals aged 18-24. The proposal anticipates a ISK 3.6 billion [$30.1 million; €26.5 million]. In addition, the proposal asserts that the following groups will also benefit from the tax level adjustment: people aged 25 – 34, people with disabilities, the elderly, people who do not own a home, people who receive special housing benefits.

The total impact of the changes to the taxation system would amount to ISK 14.7 billion [$120.4 million; €106.1 million].

Per the unions’ co-signed statement which was issued in advance of the press conference, the chairs of the four unions—VR, Efling, VLFA and VLFGrv—responded to the government’s proposals “ …with anger and disappointment.”

“Negotiations have been in a critical position after the SA business association made an offer last week which would have led to reduced purchasing power for large groups of workers,” read the statement. “The SA in turn rejected a fair counteroffer by the four unions.” The unions plan to hold internal meetings about the issue over the next few days and will then meet with SA again in the company of a state mediator.

“The four unions stand united and steadfast in their demand that workers should be able to live off their wages,” closed the statement, asserting “that the government should make long overdue systemic changes in the direction of justice.”

Bjarni’s Power Point presentation can be accessed in full (in Icelandic) here.

Read an English translation of the union chairs’ statement, here.

Website Showing Icelanders’ Income Won’t Be Shut Down


An injunction against, a website that makes Icelanders’ income public, has been denied, RÚVreports. The injunction was filed by Ingvar Smári Birgisson, lawyer and chairman of Young Independents (the youth organisation of the Independence Party of Iceland), who called the website a violation of the privacy act and the handling of personal information. went online last Friday. It provides information on the wages of all adult individuals residing in Iceland for an initial monthly subscription fee of ISK 2,790 ($23/€20), lowered to ISK 790 ($7/€6) from the second month onward. The website was created “with the aim of promoting informed and honest discussion about the participation of taxpayers in the public sector,” states.

A statement from the District Court of Reykjavík reads that as the issue is already being considered by the appropriate authorities and a decision is forthcoming, it does not consider it appropriate to apply an injunction on the website. Ingvar Smári expressed disappointment in the decision, stating “in view of the fact that the magistrate accepts the violation of statutory rights to privacy, I of course consider it necessary to defend my rights in court.”

The Icelandic Data Protection Authority has received at least nine complaints from individuals about Labour union representatives, however, have expressed support for the initiative. “This data brings out the inequality and injustice that thrives in Icelandic society and it is therefore extremely important that this website isn’t shut down,” stated Vilhjálmur Birgisson in a Facebook post.

Local Councils Demand Share of Tourist Tax

The local council of Skútustaðahreppur wants to see taxes collected from overnight stays directed to local authorities for the building of tourist infrastructure, RÚV reports. The government previously pledged to transfer the funds earned through taxation of overnight stays to municipal governments during this electoral term as part of a revision of income. The matter, however, is absent from next year’s budget bill and not listed on the parliament’s agenda this winter.

The local council of Skútustapahreppur expressed disappointment at the lack of action on the issue. Þorsteinn Gunnarsson, the council’s director, said the funds were much needed. “There are a number of projects that have been on hold that this funding could be used for. Construction of toilet facilities, hiking and cycling paths around Mývatn lake and many more. So this is funding that would immediately go into the development of infrastructure here.”

Based on the number of overnight stays, it is estimated the tax will put ISK 30 to 35 million ($256,000-299,000/€221,000-258,000) in the treasury’s coffers, which could be funnelled to local governments. Þorsteinn Gunnarsson says transferring the taxes to municipalities should be a simple matter.

Aldís Hafsteinsdóttir, the new chairperson of the Icelandic Association of Local Authorities, urges the government to amend the budget bill and transfer the overnight stay tax to local councils starting next year. “The overnight stay tax is intended to support development at tourist destinations all across the country. So it is important that it goes to those who are overseeing the destinations, which are to the greatest extent the local councils.”

Opinions Divided Over Website Which Publishes Icelanders’ Income


Opinions are divided about, a new website which makes the income of all Icelanders public. While labour union representatives celebrate the initiative, other individuals have filed complaints against the website with the Icelandic Data Protection Authority.

The website went online on October 12, and has been widely reported on in media since. “ publishes information on the wages of all adult individuals, with the aim of promoting informed and honest discussion about the participation of taxpayers in the public sector,” the website states.

Though the Directorate of Internal Revenue publishes a list of 40 individuals paying the highest taxes in Iceland each year, according to the data provided by, the list does not necessarily show the highest earners. This is because tax on capital earnings is significantly lower than income tax in Iceland, Kjarninn reports. shows, for example, that six Icelanders earned more than ISK 1 billion ($8.5m/€7.4m) in capital gains in 2016, three over ISK 2 billion ($17.1m/€14.7m), and two over ISK 3 billion ($25.6m/€22.1m). At least two of those individuals were not on the Directorate of Internal Revenue’s highest taxpayers list.

Drífa Snædal, general secretary of the Federation of General and Special workers in Iceland, expressed support for the initiative to make Icelanders’ income public in a Facebook post. “In secrecy lies injustice,” she stated. “I have never understood why income should be a secret and welcome this initiative.”

The Icelandic Data Protection Authority has however received at least nine complaints from individuals about the website, including Björgvin Guðmundsson, Partner and Senior Account Manager at KOM Consulting, who calls the initiative “clearly illegal.” The Authority is considering the case though it remains unclear when a decision will be made.

Ingvar Smári Birgisson, lawyer and chairman of Young Independents (the youth organisation of the Independence Party of Iceland), filed an injunction against the website yesterday, calling it a violation of the privacy act and the handling of personal information. A notice on, however, states that “since the parliament has specifically authorised the publication of information from the tax register, anyone is permitted to do so.” Further information on the website says names and income information will not be removed from the site without “specific and substantive reasons.”