The total turnover of enterprises in activities that are subject to VAT, excluding travel agencies and land passenger transport, amounted to 734 billion ISK in the period of May to June 2017, which is an increase of 0.4% compared to the same period in 2016. On an annual basis, the turnover was 2.7% higher in the period from July 2016 to June 2017 compared to the preceding twelve months. Travel agencies were exempt from VAT until 2016, and this should be taken into account when comparing turnover before and after that change.

The total turnover of enterprises in activities that are subject to VAT amounted to 757 billion ISK in the period of May to June 2017, which is an increase of 0.4% compared to the same period in 2016.

Table 1. Turnover according to VAT-reports (billions ISK)
  May-June 2016 May-June 2017 % July 2015-June 2016 July 2016-June 2017 %
Total 754 757 0.4 3,944 4,120 •²
Total excluding travel agencies and land passenger transport¹ 731 734 0.4 3,891 3,994 2.7
A-01/A-02 Agriculture and forestry² 50 51³ •³
A-03/C-102 Fishing, aquaculture; fish processing 60 52 -13.4 374 312 -16.5
C-24 Manufacture of basic metals 34 36 5.3 212 206 -2.6
C Manufacturing excluding fish processing (10.2) and manufacture of basic metals (24) 86 78 -8.8 446 464 3.9
D/E Electricity, gas;  water supply; sewerage and waste management 26 27 1.6 165 164 -0.1
F/B Construction, mining and quarrying 53 58 10.2 238 302 27.0
G-45 Wholesale and retail trade and repair of motor vehicles and motorcycles 38 40 5.4 154 165 7.6
G-46171/G-46172/G-46381 Wholesale of fish and fish markets 40 33 -18.2 241 199 -17.2
G-4671 Wholesale of fuels 20 22 9.4 110 118 6.4
G-46 Other wholesale 61 63 2.0 334 343 2.5
G-47 Retail trade 74 78 5.5 414 439 6.0
H Transportation and storage¹ 81 81 0.5 410 432
I Accommodation and food service activities 32 34 7.3 150 183 22.0
J Information and communication 33 34 1.2 190 193 1.2
N-7711 Renting and leasing of cars and light motor vehicles 9 11 19.2 39 49 26.7
N-79 Travel agency, tour operator reservation service and related activities¹ 19 20 4.4 45 104
Other fields of activity 70 74 5.4 371 396 6.6
¹Since the beginning 2016, some economic activities are no longer exempt from VAT, e.g. travel agencies (section N) and certain types of passenger transportation (section H).
²Most farmers report VAT every 6 months. Hence data in two-month buckets are not a good indicator of trends in agriculture.
³Reports from farmers who report VAT every 6 months are still being handed in. The revised numbers for VAT-turnover in the first half of 2017 are therfore likely to increase.

Increased turnover in activities related to tourism
The turnover increased in most activities related to tourism, e.g. the turnover in “Accommodation and food services” increased by 22.0% in the period July 2016 to June 2017 compared to the preceding twelve months. In the same period, turnover in car rental increased by 26.7%.

Travel agencies and land passenger transport were not subject to VAT before 2016, and thus comparing turnover including these activities in 2016 with turnover excluding these activities prior to 2016 would be misleading. Turnover in the category “Travel agency, tour operator and other reservation service and related activities” increased by 4.4% in May to June 2017 compared to the same period in 2016.

There was a marked increase in turnover in the activity “Construction, mining and quarrying” (27.0%). This increase might be partly due to the boom in the tourism industry.

More detailed data and data further back in time can be found in web-tables.

Turnover in fishing and fish processing decreased
The turnover in fishing and fish processing was 16.5% lower in the period July 2016 to June 2017 than in the preceding 12 months. During the same period, the turnover in wholesale of fish decreased by 17.2%.

Table 2. VAT-turnover July 2016 to June 2017, by VAT-rate (ISK billions)
  Zero rate Reduced rate Standard rate Total
Total 1,250 (30%) 895 (22%) 1,975 (48%) 4,120
A-01/A-02 Agriculture and forestry 10 (19%) 10 (20%) 31 (60%) 51
A-03/C-102 Fishing, aquaculture; fish processing 207 (66%) 91 (29%) 14 (5%) 312
C-24 Manufacture of basic metals 205 (99%) 0 (0%) 1 (1%) 206
C Manufacturing excluding fish processing (10.2) and manufacture of basic metals (24) 152 (33%) 135 (29%) 176 (38%) 464
D/E Electricity, gas;  water supply; sewerage and waste management 6 (3%) 25 (15%) 134 (81%) 164
F/B Construction, mining and quarrying 5 (2%) 1 (0%) 296 (98%) 302
G-45 Wholesale and retail trade and repair of motor vehicles and motorcycles 10 (6%) 0 (0%) 156 (94%) 165
G-46171/G-46172/G-46381 Wholesale of fish and fish markets 148 (74%) 42 (21%) 9 (5%) 199
G-4671 Wholesale of fuels 25 (21%) 6 (5%) 86 (73%) 118
G-46 Other wholesale 28 (8%) 91 (26%) 224 (65%) 343
G-47 Retail trade 19 (4%) 186 (42%) 234 (53%) 439
H Transportation and storage 334 (77%) 25 (6%) 74 (17%) 432
I Accommodation and food service activities 5 (3%) 170 (93%) 8 (4%) 183
J Information and communication 39 (20%) 16 (8%) 138 (72%) 193
N-7711 Renting and leasing of cars and light motor vehicles 1 (1%) 0 (1%) 48 (98%) 49
N-79 Travel agency, tour operator reservation service and related activities 15 (14%) 82 (79%) 7 (6%) 104
Other fields of activity 42 (11%) 14 (4%) 340 (86%) 396

Turnover by VAT-rate
The higher VAT-rate, or standard rate, is now 24%. All goods and services are subject to this rate unless otherwise specified in the law on VAT (law no. 50 from 1988).

The lower VAT-rate is now 11%. Examples of goods and services in this category include: books, newspapers, house-heating, food, restaurants, accommodation services, and domestic passenger transport (excluding public transport). Alcoholic beverages are subject to the lower VAT-rate since 1 January 2016.

A zero-rated supply falls within the scope of the VAT Act, but no output VAT is charged since the rate is zero. This category includes export of goods and services, and contractual payments from the Treasury related to the production of milk and sheep farming.

Some services are exempt from VAT, e.g. public transport, medical services, athletic activities, museums, postal services, and lotteries. The suppliers of such services cannot charge VAT or get credit for input VAT on purchases for the exempt (part of the) business.

Particulars about VAT can be found at the Directorate of Internal Revenue.

Revision of statistics
At the time of our previous press release, in July, the VAT turnover in March to April 2017 was estimated 646.3 billion ISK which was an increase of 1.3% compared to the same period in 2016. At present, more data are available and the VAT turnover in March to April 2017 is estimated 651.9 billion ISK which is an increase of 2.3% compared to the same period in 2016.

Other statistics on business economy
Statistics Iceland publishes annual income and balance statements of enterprises by activity, based on tax returns, providing a detailed picture of the individual sectors.

Statistics