Parliament Forgets To Lower Beer VAT - The Reykjavik Grapevine

Parliament Forgets To Lower Beer VAT

Photos by
John Rogers

Perhaps in the rush to get things done before the holidays, parliament forgot to include one key point in their legislation.

MBL reports that a number of changes to the VAT – put together in an omnibus bill dubbed “the tapeworm” – were passed by parliament before the holidays and were supposed to go into effect this year. However, one detail was left out: lowering the VAT on beer from the third bracket down to the bottom bracket.

As reported, this change would have reduced the tax on beer from 24% to 11%. While this was included in most forms of alcohol, the code related to beer was not included.

Bene­dikt S. Bene­dikts­son, a specialist at the Tax Affairs Office of the Ministry of Finance, admitted that the exclusion was an error. However, he added that the language of the legislation is such that it can be safely assumed that beer is included in the particular portion of the legislation pertaining to alcohol.

Parliament will reconvene on January 19, and it is presumed that the error will be corrected at that time.


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