áfabevallás

Áfabevallás refers to the Value Added Tax (VAT) return or declaration in Icelandic. It is a mandatory submission that businesses and individuals registered for VAT must complete and file with the Icelandic Revenue and Customs (Ríkisskattstjóri). This declaration details the amount of VAT collected on sales and the amount of VAT paid on purchases during a specific period, typically monthly or quarterly.

The primary purpose of the áfabevallás is to allow the tax authorities to calculate the net VAT liability of the taxpayer. If the VAT collected on sales exceeds the VAT paid on purchases, the difference is owed to the state. Conversely, if the VAT paid on purchases is greater than the VAT collected on sales, the taxpayer may be eligible for a VAT refund.

Businesses are required to register for VAT if their taxable turnover exceeds a certain threshold within a 12-month period. Once registered, they must issue VAT-compliant invoices for their goods and services and maintain accurate records of all VAT-related transactions. The áfabevallás is filed electronically through the tax authorities' online portal. Penalties and interest may be imposed for late filing or incorrect declarations. Understanding and correctly completing the áfabevallás is a crucial aspect of tax compliance for businesses operating in Iceland.