Key Developments in Iceland’s Cruise Industry
The recent passage of the Infrastructure Fees Law has brought several changes to Iceland’s cruise sector, sparking debate within the industry. Below are the key points regarding accommodation tax, infrastructure fees, and VAT exemptions:
Accommodation Tax:
A tax of 400 ISK must now be paid for each passenger staying aboard a cruise ship engaged in domestic navigation in Iceland for every 24 hours (or part thereof).
This tax does not apply to the following:
- Crew and staff aboard the ship.
- Passengers on accommodation units are exempt from VAT.
Notably, the accommodation tax is not subject to VAT under the new regulations.
Infrastructure Fee:
An infrastructure fee of 2,500 ISK is required for each passenger aboard cruise ships in international navigation for every 24 hours (or part thereof) the ship remains in Iceland’s customs area.
No infrastructure fee is applied under specific circumstances, such as:
- Forced docking due to emergencies like accidents, illnesses, or technical issues.
- Crew and staff aboard the ship.
International cruise ships must pay the infrastructure fee but are exempt from the accommodation tax, whereas domestic cruise ships pay the accommodation tax but not the infrastructure fee.
VAT Exemption Extension:
The VAT exemption for expedition vessels has been extended until January 1, 2026, giving operators additional time to adapt to the evolving tax landscape.
These changes reflect Iceland’s commitment to balancing tourism growth with sustainable economic and environmental policies. However, the sudden imposition of these fees has raised concerns within the industry, particularly regarding retroactive charges for trips already sold. Nonni Travel remains fully prepared to assist cruise operators in navigating these new regulations and ensuring smooth operations in Iceland’s ports.
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Discover the Arctic with Nonni Travel
Founded in 1988, and operating cruise service since 1996, Nonni Travel offers a seamless blend of expertise, sustainability, and a deep-rooted connection to the Arctic region. From the rugged coasts of Iceland to the tranquil beauty of the Faroe Islands and the majestic icefields of Greenland, our team is ready to make your voyage exceptional.
We specialize in:
- Ship Logistics & Handling: Seamlessly managing port operations, provisioning, and coordination to ensure smooth sailing.
- Tailored Shore Excursions: Designing unique land-based adventures that showcase the Arctic’s natural beauty and rich culture, tailored to passenger preferences.
- Shore Handling & Passenger Services: End-to-end support with local flair.
- Community-Integrated Experiences: Creating meaningful connections between passengers and local Arctic communities.
Get in Touch
Contact our team to discuss how we can support your cruise operations in Iceland, Greenland, and the Faroe Islands.