Quick answer: To add VAT to a price, multiply the VAT-exclusive price by 1.24 (for 24% VAT) or 1.11 (for 11% VAT). To find the VAT already included in a price, multiply the VAT-inclusive total by 19.35% (for the 24% bracket) or 9.91% (for the 11% bracket) — these are Skatturinn's official de-grossing percentages, and they save you from having to divide manually every time.
Adding VAT to a price (price excl. VAT → price incl. VAT)
If you know the price before VAT and need to work out the final price a customer pays:
Price incl. VAT = Price excl. VAT × (1 + VAT rate)
- 24% VAT: multiply by 1.24
- 11% VAT: multiply by 1.11
Example: A product costs 10,000 ISK before VAT and is taxed at 24%.
10,000 × 1.24 = 12,400 ISK (VAT amount: 2,400 ISK)
Removing VAT from a price (price incl. VAT → price excl. VAT)
This is the calculation most people actually need day to day — you have a final price and want to know how much of it is VAT, or what the price was before VAT. Rather than dividing by 1.24 or 1.11 every time, Skatturinn publishes fixed de-grossing (afreikningur) percentages that give you the VAT amount directly from the total price:
| VAT bracket | De-grossing percentage | Formula |
|---|---|---|
| 24% | 19.35% | VAT amount = Total price × 0.1935 |
| 11% | 9.91% | VAT amount = Total price × 0.0991 |
Worked example (24% bracket): A sale totals 1,800,000 ISK, VAT included, in the 24% bracket.
VAT amount = 1,800,000 × 0.1935 = 348,300 ISK
Price excl. VAT = 1,800,000 − 348,300 = 1,451,700 ISK
Worked example (11% bracket): The same 1,800,000 ISK total, but in the 11% bracket.
VAT amount = 1,800,000 × 0.0991 = 178,380 ISK
Price excl. VAT = 1,800,000 − 178,380 = 1,621,620 ISK
Why 19.35% and 9.91%, not 24% and 11%?
These percentages look unusual at first, but they come directly from the standard VAT back-calculation formula: rate ÷ (100 + rate) × 100. For the 24% bracket, that's 24 ÷ 124 × 100 = 19.35% (rounded). For the 11% bracket, it's 11 ÷ 111 × 100 = 9.91% (rounded). Using these fixed percentages against the total price gives the same answer as the full formula, without needing to divide by 1.24 or 1.11 and then subtract each time.
Net VAT owed: output VAT minus input VAT
For a VAT return, the amount actually paid to Skatturinn isn't just the VAT collected on sales — it's that amount minus the VAT already paid on business purchases:
VAT payable = Output VAT (on sales) − Input VAT (on purchases)
If input VAT is higher than output VAT for a period (for example, after a large equipment purchase), the difference is refundable rather than payable.
Common mistakes
- Dividing by the VAT rate instead of using the de-grossing percentage. Dividing a VAT-inclusive price by 1.24 gives the price excl. VAT correctly, but subtracting that from the total to get the VAT amount is an extra step — the de-grossing percentage (19.35%) gets you there directly.
- Applying the wrong bracket's de-grossing percentage. Always confirm whether the sale falls under the 24% or 11% rate before calculating (see our VAT rates guide).
- Forgetting to net input VAT against output VAT when estimating what's actually owed for a filing period.
Important / Heimild og fyrirvari
VSK.is is an independent informational resource and is not affiliated with Skatturinn or any Icelandic government body. VAT rates and de-grossing percentages are set by Icelandic law and can change if rates change. Always confirm current figures with Skatturinn.
Frequently Asked Questions
It's the official de-grossing percentage for the 24% VAT bracket — multiplying a VAT-inclusive total by 19.35% gives you the VAT amount directly.
Multiply the VAT-inclusive total by 0.1935 if it's in the 24% bracket, or by 0.0991 if it's in the 11% bracket. The result is the VAT amount included in that price.
Multiply the VAT-exclusive price by 1.24 for the standard rate, or 1.11 for the reduced rate.
Output VAT is the VAT you charge on your sales. Input VAT is the VAT you paid on your own business purchases. The difference between the two is what you owe (or get refunded) on your VAT return.
Because the de-grossing percentage is calculated against the total (VAT-inclusive) price, not the pre-VAT price — so it's rate ÷ (100 + rate), not the rate itself.
Important
VSK.is is an independent informational resource and is not affiliated with Skatturinn or any Icelandic government body. This article distinguishes what we could verify from Icelandic legislative sources (the charity exemption, out-of-scope private sales) from what remains an open question (a possible margin scheme for commercial resellers). Always confirm your specific situation with Skatturinn or a qualified Icelandic tax advisor before making a VAT decision.