Importing tools & hardware from Canada — 2026 rules
When you import tools & hardware (HS heading 8205.59) — for example hand tools, power tools and fasteners — from Canada to Iceland, you owe 0% general duty and 24% VAT on the full customs value (CIF price).
Tools are generally duty-free, but heavy shipments can raise freight cost and therefore the customs value.
Canada has a free-trade agreement with Iceland via EFTA, which can reduce duty on goods of Canadian origin.
Worked examples
Here's how the total cost builds up for three sample item prices from Canada, using an exchange rate of 102.5 ISK per CAD.
| Item price | Customs value (CIF) | Duty | VAT | Total landed cost |
|---|---|---|---|---|
| 10,000 CAD | 1,029,500 ISK | 0 ISK | 247,080 ISK | 1,278,530 ISK |
| 35,000 CAD | 3,592,000 ISK | 0 ISK | 862,080 ISK | 4,456,030 ISK |
| 100,000 CAD | 10,254,500 ISK | 0 ISK | 2,461,080 ISK | 12,717,530 ISK |
Step by step: customs clearance
- 1.The seller in Canada attaches shipping documents (invoice, customs value and HS heading 8205.59) to the carrier's booking.
- 2.The carrier (post, FedEx, UPS or DHL) files an electronic customs declaration with Icelandic customs before the shipment arrives.
- 3.Duty and VAT are calculated on the customs value (CIF), and you receive a payment request, often before the item is released.
- 4.Once fees are paid, the shipment is released — for home delivery or pickup at the carrier's depot.
Frequently asked questions
Is there duty on tools & hardware from Canada?+
No — tools & hardware carries no general duty under HS heading 8205.59, but 24% VAT is charged on the customs value regardless of the country of origin.
What is the customs value and how is it calculated?+
The customs value (CIF price) is the item price in Icelandic krónur plus freight and insurance to the Icelandic border. Both duty and VAT are calculated on this combined figure, not just the item's price.
Does the EEA/EFTA agreement with Canada help?+
Canada is covered by an EEA or EFTA free-trade agreement with Iceland. With a valid proof of origin (e.g. an EUR.1 certificate or an origin declaration on the invoice), duty on qualifying goods can be reduced or removed — VAT is still always charged regardless of origin.
Do I have to pay VAT on small shipments?+
Yes. Unlike many other countries, Iceland has no de-minimis threshold exempting low-value parcels — 24% VAT is charged on almost all incoming shipments, regardless of how small the declared value is.
How long does customs clearance from Canada take?+
Canada has a free-trade agreement with Iceland via EFTA, which can reduce duty on goods of Canadian origin.
Other categories from Canada
| Category | Duty | VAT | |
|---|---|---|---|
| Consumer Electronics | 0% | 24% | View → |
| Smartphones & Mobile Devices | 0% | 24% | View → |
| Laptops & Notebooks | 0% | 24% | View → |
| Clothing & Fashion | 12% | 24% | View → |
| Shoes & Footwear | 10% | 24% | View → |
| Cameras & Optics | 0% | 24% | View → |
| Drones & UAVs | 0% | 24% | View → |
| Safety Gear & Protective Equipment | 0% | 24% | View → |
| Sports Equipment | 0% | 24% | View → |
| Leather Goods | 12% | 24% | View → |
| Audio Gear & Headphones | 0% | 24% | View → |