Electronic invoice in Iceland

Understand Iceland’s Peppol-based B2G requirements, ÍST TS 236 standard, four-corner model and voluntary B2B e-invoicing framework.

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Overview

Iceland built its e-invoicing as a decentralised interoperability model on Peppol, not as a tax clearance system. The tax administration, Skatturinn, is not a fifth corner in the invoice flow: it does not approve an invoice before issue, does not receive invoice-level data in real time, and there is no VAT real-time reporting mandate.

For B2G the picture has two layers, and conflating them is the mistake worth avoiding. Regulation No. 44/2019 imposes a receiver mandate on public buyers. But the state's general commercial purchasing terms have required suppliers to invoice electronically since 1 January 2015 — so in practice B2G should be treated as mandatory structured e-invoicing even though the statute does not say so. For domestic B2B and B2C there is no mandate at all, and no published date for one.

0196:kennitala

the Icelandic national identifier is the Peppol participant address

ÍST TS 236

the national specification built on Peppol BIS Billing 3.0 — not a separate tax format

7 years

retention from the close of the accounting year, storage abroad permitted

Timeline

Iceland has been at this since 2013, and the public-sector work is finished. Nothing is scheduled ahead.

Already in force

31 May 2013

Regulation No. 505/2013 — the legal foundation

Electronic and paper invoices were placed on an equal legal footing, with requirements set for electronic documents, their traceability, reliability, retention and transmission through intermediaries and service providers.

1 January 2015

The state requires electronic invoices from suppliers

The general government purchasing terms began requiring invoices to state institutions to be sent electronically unless the parties agree otherwise. This is the contractual layer — see B2G.

24 January 2019

Regulation No. 44/2019 implements the EU directive

Directive 2014/55/EU was implemented after its incorporation into the EEA Agreement. Central government institutions had to be able to receive and process EN 16931 invoices by 18 April 2019; municipalities, their institutions, public undertakings and other covered bodies by 18 April 2020.

1 May 2020

Outgoing state invoices go electronic

All invoices issued by the Treasury and state institutions were converted to electronic format. In the same year Fjársýsla ríkisins — the Financial Management Authority — became the Icelandic Peppol Authority.

15 November 2021

ÍST TS 236:2021 — the national CIUS

Electronic Billing for Iceland entered into force: a national implementation of Peppol BIS Billing 3.0 and EN 16931, adapted to Icelandic accounting and VAT legislation and business practice.

There is nothing in the "still ahead" column. No general domestic B2B or B2C mandate exists, and the European Commission's published country information for Iceland shows no next stage and no date for one. The EU's 1 July 2030 ViDA date is not an Icelandic deadline — see EEA, the EU and ViDA.

B2G — two obligations

This is the section worth reading carefully, because the legal answer and the practical answer differ.

The statutory obligation

Regulation 44/2019 is directed at the public buyer: it must receive and process an EN 16931 electronic invoice. The regulation contains no universal statutory duty on every supplier to issue one — which is why the European Commission country sheet records the formal B2G supplier mandate as no.

The contractual obligation

Government purchasing terms have required electronic invoices since 2015, and individual public buyers impose their own rules — Reykjavík City and Landspítali, the national hospital, both require invoices to be sent electronically. OpenPeppol accordingly describes e-invoicing for suppliers to public authorities as mandatory.

For a technical implementation, treat Icelandic B2G as mandatory structured e-invoicing. Keep the legal distinction in mind only when the question is about liability: a supplier that invoices on paper is not breaching a statute, but is breaching the buyer's terms — and the invoice will not enter the automated processing and payment flow.

B2B and B2C

No general mandate in either. Trading parties may agree the form of the electronic document and how it is transmitted, and a recipient is entitled to define in advance which forms and delivery methods it accepts. There is no mandatory transmission to Skatturinn.

What is available in domestic B2B

—Peppol BIS Billing — optional but well supported

—Other EDI arrangements, including legacy EDIFACT still present in commercial integrations

—Electronic invoice systems compliant with Regulation 505/2013

—PDF and other electronic documents, where the reliability and traceability requirements are met

—Paper

For B2C there is no structured e-invoicing mandate. Retailers and service providers selling mainly to consumers must issue a sales invoice or register sales through a cash register where the rules require it, and a receipt or sales invoice applies to prepayments. Peppol is not required.

The four-corner model

Iceland uses the classic decentralised structure: supplier → supplier's Access Point → buyer's Access Point → buyer. Regulation 505/2013 governs the use of message intermediaries and service providers, and the B2G operating model runs on the Peppol eDelivery Network.

What Iceland does not have

A central state invoice platform every document must pass through — the Iceland Peppol Authority Specific Requirements record mandatory use of centralised services as no

A tax fifth corner: Skatturinn receives no mandatory copy of each invoice, assigns no clearance ID and issues no validation response before delivery

Invoice-level VAT real-time reporting — VAT returns are filed electronically, but electronic filing is not continuous transaction control

Decentralised Peppol four-corner with a post-audit tax model. No clearance, no tax fifth corner, no real-time invoice reporting.

Formats and PDF

Regulated B2G uses EN 16931, implemented nationally as ÍST TS 236:2021 — Electronic Billing for Iceland. Icelandic Standards describes TS 236 as a specification based on Peppol BIS Billing 3.0, itself a CIUS of EN 16931, taking account of Icelandic accounting and VAT legislation and national business practice.

In practicePeppol BIS Billing 3.0 in UBL 2.1 XML, subject to the TS 236 business rules

CIIUN/CEFACT Cross Industry Invoice is an EN 16931 syntax at European level under Commission Implementing Decision (EU) 2017/1870, and the EC country information mentions it. But no separate Icelandic CII localisation or requirement to use CII was found — TS 236 is oriented on Peppol BIS Billing 3.0 and UBL 2.1

Local tax formatNone. Iceland has no tax-authority XML schema of the FatturaPA, FA(3) or RO_CIUS kind. TS 236 is a localisation, not a standalone clearance format

EDIFACTHistorically used, and the Icelandic EDI community decided to migrate to Peppol BIS. Legacy EDI may persist in commercial integrations but is not the target B2G standard

Where the PDF sits

In B2G, no. Regulation 44/2019 defines an e-invoice as one issued, sent and received in a structured electronic format allowing automatic and electronic processing. An ordinary PDF does not meet that definition, so a PDF-only invoice cannot be treated as a compliant B2G e-invoice. It may accompany the XML as a visualisation or attachment.

In private B2B and B2C the regime is much more flexible — Regulation 505/2013 imposes no XML-only rule. But sending a .pdf by email does not automatically produce a compliant electronic accounting source document either. The authenticity and integrity, traceability and accepted-delivery-method requirements of Regulation 505/2013 still have to be satisfied, and the electronic source document must be linked to the corresponding accounting entries.

Identifiers

The national scheme is EAS/ICD 0196 — Icelandic identifier, the kennitala. The Iceland Peppol Authority Specific Requirements allow Icelandic end users to use the kennitala as both trading-party identifier and endpoint identifier.

Format

0196:

The kennitala is a national legal registration identifier, not a VAT number scheme. No second national EAS mandatory for VAT-number routing is established in the published Iceland PA requirements

There is no separate government routing identifier of the German Leitweg-ID kind

One address scheme, one identifier, no routing code to chase from the buyer. This is part of why Iceland is a light integration.

Peppol in Iceland

For structured B2G, Peppol is the main interoperability channel — the European Commission names Iceland's B2G operating model as the Peppol eDelivery Network outright. It is not a legally mandatory universal transport channel for all private B2B or B2C, since Regulation 505/2013 lets trading parties agree the form and method of transmission.

B2GPeppol is the standard route

B2BOptional, but actively usable

B2CNot required

The Peppol Authority

Fjársýslan — Fjársýsla ríkisins, the Financial Management Authority, took the role in 2020 and remains listed by OpenPeppol as the Peppol Authority for Iceland. It also runs the state's supplier-facing e-invoice gateway, linked under Resources.

EEA, the EU and ViDA

One term should be kept out of Icelandic documentation: intra-EU transaction. Iceland is in the EEA but outside the EU VAT harmonisation regime — EFTA states plainly that direct and indirect taxation are not covered by the EEA Agreement. A transaction between an Icelandic and a German or French company therefore does not become an intra-Community supply or acquisition for EU VAT purposes merely because Iceland is an EEA member.

The same reasoning disposes of ViDA. Its digital reporting requirements apply to EU cross-border B2B transactions from 1 July 2030, but ViDA is EU VAT legislation and harmonised indirect taxation is outside the EEA Agreement. 1 July 2030 is not an Icelandic e-invoicing mandate date.

An Icelandic supplier can of course use Peppol to invoice an EU customer, and often should. What has to be checked separately is the counterparty's national rules: the scope of a given European B2B mandate may treat invoices to and from non-established or third-country parties very differently.

Exports outside the EU

No mandatory Icelandic XML or clearance process applies. The agreed invoicing method is used, subject to Icelandic accounting and invoice requirements. Note that the VAT treatment is determined independently of the transport channel — a Peppol invoice does not by itself substitute for a place-of-supply analysis or for export evidence.

Requirements for providers

Iceland is one of the simplest Peppol jurisdictions in Europe. The answers below come directly from the Iceland Peppol Authority Specific Requirements, where every additional national requirement is recorded as no.

National accreditationNo — no Icelandic service provider accreditation

Icelandic legal entityNo Iceland-specific Peppol requirement

Local representativeNo Iceland-specific Peppol requirement

Official electronic mailboxNo

Mandatory national SMPNo

National InfoSec requirementsNo

National SLA or reportingNo

A foreign certified Access Point can therefore onboard Icelandic customers directly. OpenPeppol clarifies that the country listed for a Certified Service Provider reflects its legal residence, not its geographical area of operations — combined with the absence of any Iceland-specific accreditation, an already certified Access Point may serve Icelandic end users without a separate national licence.

Two caveats that are not Peppol conditions but can still apply. Separate VAT registration or corporate obligations may arise if a foreign provider itself makes taxable supplies in Iceland — Skatturinn provides for a local VAT representative in some cases for foreign taxable persons without a permanent establishment. And the absence of Iceland-specific reporting does not remove OpenPeppol's own governance: the End User Statistics and Transaction Statistics reporting processes for production Access Points apply as they do everywhere.

Regulation 505/2013 permits a third party to provide transmission and electronic document services, but legal responsibility for correctly issuing and accounting for the invoice stays with the trading party. The provider is answerable for the services it supplies, and mapping or transformation must be performed within the agreed service arrangements.

Archiving

Under the Accounting Act No. 145/1994, accounting records must be kept securely for seven years from the close of the accounting year in question. That covers invoices, receipts, bank statements, contracts and the other documents supporting financial transactions.

Electronic storage is permitted provided records stay accessible and legible for the full period, and the archive is in a human-readable format

Electronic invoices may be stored abroad, provided they are made available for auditing and adequate controls and integrity assurance are in place

Regulation 505/2013 provides that an electronic external source document invoice can count as the original, where traceability and reliability are ensured

The permission to archive abroad matters commercially: a European provider can host an Icelandic client's archive on existing infrastructure without a local data centre, so long as auditability and integrity are demonstrable.

Penalties

No fixed administrative fine for failing to issue an e-invoice was found in the Icelandic regulations — nothing comparable to the penalty schedules of the clearance countries. Regulation 44/2019 obliges the public buyer to receive and process compliant e-invoices; it contains no table of supplier e-invoicing fines.

For central government, an invoice that does not meet the electronic invoice requirement in the purchasing terms simply fails the buyer's invoicing conditions and may be rejected or excluded from the standard electronic processing and payment flow. That is a contractual and operational consequence, not a statutory e-invoice fine.

The general VAT and accounting regime is untouched. The VAT Act provides for liability for tax offences: supplying false or misleading VAT information knowingly or through gross negligence can attract fines, liability extends to those who assist, legal persons can be fined, and the amounts under the statutory mechanisms can be substantial. These are general VAT offences — not a special penalty for an invoice format or for declining to use Peppol.

VAT deduction

A structured e-invoice is not the only lawful basis for deducting input VAT in Iceland. What the legislation requires is reliable and sufficient accounting documentation allowing VAT amounts to be traced back to supporting evidence.

Skatturinn's published VAT guidance lists among the documents supporting input VAT: original sales invoices; electronic sales invoices; compliant printed copies of e-invoices; credit notes; settlement documentation in the cases provided for; and customs VAT documentation.

What is decisive is a legally compliant invoice or supporting accounting document that satisfies the form, content, reliability and traceability requirements — not whether it happened to travel through Peppol.

How we help

Iceland needs no tax integration and no local licence. What it needs is Peppol done properly, with the national profile applied:

Peppol BIS Billing 3.0 in UBL 2.1, validated against the ÍST TS 236 business rules

Participant onboarding under 0196:kennitala

Delivery to Icelandic state institutions, municipalities and public undertakings without a local entity or licence

Migration from legacy EDIFACT integrations to Peppol BIS

Seven-year archiving with traceability and integrity preserved, hosted outside Iceland where that suits

Conversion to the national CIUS an EU counterparty requires on the other side of the trade

Connection by API, SFTP and CSV, with ERP and IDoc source data

Frequently asked questions

Is e-invoicing mandatory in Iceland?

In practice yes for the public sector, in law only for the buyer. Regulation 44/2019 obliges public buyers to receive and process EN 16931 invoices — which is why the EC country sheet records the formal B2G supplier mandate as "no". But government purchasing terms have required suppliers to invoice electronically since 1 January 2015, and buyers such as Reykjavík City and Landspítali require it outright. For domestic B2B and B2C there is no mandate and no published date for one.

Can I serve Icelandic clients from my existing Peppol Access Point?

Yes. The Iceland Peppol Authority Specific Requirements record every additional national requirement as "no" — no service provider accreditation, no mandatory centralised services, no national information security or SLA requirements, no national reporting. OpenPeppol also clarifies that the country listed for a Certified Service Provider is its legal residence, not its area of operations. No Icelandic entity, representative, licence or official mailbox is required.

What is ÍST TS 236 and do I have to implement it?

It is the national specification, in force since 15 November 2021, describing the structure of electronic invoices as required by Icelandic law and business practice — based on Peppol BIS Billing 3.0, itself a CIUS of EN 16931. For public-sector delivery you should validate against its business rules. It is a localisation layer, not a separate format: there is no Icelandic tax-authority XML schema equivalent to FatturaPA, FA(3) or RO_CIUS.

Does the tax authority see my invoices?

No. Iceland runs a decentralised four-corner model with a post-audit tax regime. Skatturinn receives no mandatory copy of each invoice in the transaction flow, assigns no clearance ID, issues no validation response before delivery and is not a fifth corner. There is no invoice-level VAT real-time reporting mandate — VAT returns are filed electronically, but electronic filing is not continuous transaction control.

Which identifier do I register?

EAS 0196 with the kennitala — for example 0196:. The Iceland PA requirements allow Icelandic end users to use it as both trading-party and endpoint identifier. Note that the kennitala is a national legal registration identifier, not a VAT number scheme, and no second national EAS mandatory for VAT-number routing is established. There is also no separate government routing identifier of the German Leitweg-ID kind.

Can I still send PDF invoices?

Not to the public sector. Regulation 44/2019 defines an e-invoice as one in a structured electronic format allowing automatic and electronic processing, which an ordinary PDF is not — it may only accompany the XML. In private B2B and B2C, PDF is permitted, but emailing a file is not automatically enough: Regulation 505/2013 still requires authenticity and integrity, traceability, an accepted delivery method, and a link to the corresponding accounting entries.

Does ViDA apply to Iceland in 2030?

No. Iceland is an EEA/EFTA state, but direct and indirect taxation fall outside the EEA Agreement, so ViDA — EU VAT legislation — creates no automatic Icelandic obligation. 1 July 2030 is not an Icelandic mandate date. Nor should Iceland–EU trade be described as intra-EU: it is not an intra-Community supply or acquisition for EU VAT purposes. What does need checking is the counterparty's own national rules, which may treat invoices from third-country parties differently.

How long must I archive, and can I host abroad?

Seven years from the close of the accounting year, under the Accounting Act No. 145/1994. Electronic storage is permitted provided records remain accessible and legible throughout and the archive is human-readable — and electronic invoices may be stored abroad, provided they are available for auditing with adequate controls and integrity assurance. Under Regulation 505/2013 an electronic source document invoice can count as the original where traceability and reliability are ensured.

Summary

Iceland is a finished, low-friction Peppol country. Public buyers have received EN 16931 invoices since 2019 and 2020, the state has issued electronically since 2020, and ÍST TS 236:2021 has provided the national profile since November 2021. There is no clearance, no fifth corner, no real-time reporting and nothing scheduled ahead.

The nuance worth carrying into a project is the split B2G obligation: statutory duty on the buyer, contractual duty on the supplier. Treat it as mandatory for implementation purposes; distinguish it only when the question is about liability.

For an Access Point already certified elsewhere in Europe, Iceland requires no national accreditation, no local entity, no local licence and no official mailbox. Support 0196:kennitala, Peppol BIS Billing 3.0 and the TS 236 business rules, and you can onboard Icelandic customers directly. No integration with Skatturinn needs to be built at all.

Resources

European Commission — eInvoicing in Iceland The authoritative country profile: transposition, the operating model, the Peppol Authority and the standards in use Send an electronic invoice to the state Fjársýslan's supplier-facing gateway — the practical route for a supplier without its own Access Point ÍST TS 236:2021 — Electronic Billing for Iceland The national specification itself, from Icelandic Standards — the document your validation rules are built from Fjársýslan — the Financial Management Authority The Icelandic Peppol Authority, and the body behind the state's invoicing and procurement rules Reykjavík City — automated electronic invoices A worked example of what a real Icelandic public buyer requires from its suppliers The Accounting Act No. 145/1994 (English) The source of the seven-year retention rule and the requirements on accounting records — in English translation Skatturinn — Iceland Revenue and Customs VAT guidance, including the documents accepted as support for input VAT deduction

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