Incentives and legislation that aim to increase uptake of alternative fuels vehicles and infrastructure. 

If you know of other national or local incentives that should be included in this section, please send us an email and let us know.

Registration tax benefits

Registration tax for passenger vehicles is based on CO2 emission. The tax is 0 % for emissions up to 75 g/km CO2 emitted (NEDC). Therefore, battery electric vehicles (BEVs), hydrogen vehicles and most plug-in hybrid electric vehicles (PHEVs) are not taxed at registration. Methane and methanol vehicles are exempted from registration tax up to ISK 1 250 000 per vehicle.

Ownership tax benefits

Biannual ownership tax for passenger vehicles (<3 500 kg) is based on CO2 emissions. Vehicles with emissions below 121 g/km CO2 emitted (NEDC) are taxed at a minimum rate. Therefore, BEVs, hydrogen vehicles and PHEVs are taxed at the minimum tax rate. Methane and methanol vehicles are also taxed automatically at the lowest rate.

VAT benefits

Temporary tax expenditure:

• iVAT exemption for purchase of BEVs and hydro vehicles, with a cap of 15 000 vehicles of each type. The maximum amount of VAT exemptions is ISK 1 440 000 per vehicle.
• VAT exemption for purchase of PHEVs, with a cap of 15 000 vehicles. The maximum amount of VAT exemptions is ISK 960 000 per vehicle.
• Full VAT refund for purchase and installation of home-charging stations at residential properties.

 

Other financial benefits

Free parking is available for up to 2 hours for BEVs in Reykjavik and Akureyri.

Local incentives

Grants are available from the City of Reykjavik  to multi-apartment buildings when installing charging facilities.

AF infrastructure incentives

Incentives for charging infrastructure