Iceland Reduces VAT Refund Rate for Residential Construction, Renovation, and Maintenance

Iceland has published Law No. 51 of 22 June 2023, which reduces the refund (repayment) rate for residential property new construction, renovation, and maintenance from 60% to 35% with effect from 1 July 2023. As previously reported, the refund rate was temporarily increased to 100% from 1 March 2020 as part of COVID-19 response measures, which was subsequently extended to 31 August 2022 before reverting to 60% from 1 September 2022. As explained by Iceland's tax authority, taxpayers can sti…