The total turnover of enterprises in activities that are subject to VAT, excluding travel agencies and land passenger transport, amounted to 629 billion ISK in the period of March to April 2017, which is an increase of 0.8% compared to the same period in 2016. On an annual basis, the turnover was 3.3% higher in the period from May 2016 to April 2017 compared to the preceding twelve months. Travel agencies were exempt from VAT until 2016, and this should be taken into account when comparing turnover before and after that change.

The total turnover of enterprises in activities that are subject to VAT amounted to 646 billion ISK in the period of March to April 2017, which is an increase of 1.3% compared to the same period in 2016.

Table 1: urnover according to VAT-reports (billions ISK)
  March-April 2016 March-April 2017 % May 2015-April 2016 May 2016-April 2017 %
Total 638 646 1.3 3,891 4,113  
Total excluding travel agencies and land passenger transport¹ 624 629 0.8 3,858 3,987 3.3
A-01/A-02 Agriculture and forestry²       49 51 4.6
A-03/C-102 Fishing, aquaculture; fish processing 65 59 -9.4 380 320 -15.7
C-24 Manufacture of basic metals 34 38 10.8 221 205 -7.4
C Manufacturing excluding fish processing (10.2) and manufacture of basic metals (24) 67 67 0.9 452 472 4.4
D/E Electricity, gas;  water supply; sewerage and waste management 27 29 5.5 167 164 -1.4
F/B Construction, mining and quarrying 37 45 20.5 223 296 33.1
G-45 Wholesale and retail trade and repair of motor vehicles and motorcycles 28 29 2.8 147 163 11.0
G-46171/G-46172/G-46381 Wholesale of fish and fish markets 41 34 -18.6 241 207 -14.4
G-4671 Wholesale of fuels 16 19 17.1 114 116 1.6
G-46 Other wholesale 56 53 -3.8 328 341 4.0
G-47 Retail trade 66 68 3.7 407 435 6.8
H Transportation and storage¹ 65 61 -5.2 401 426  
I Accommodation and food service activities 22 27 18.7 144 181 25.9
J Information and communication 34 32 -6.6 186 192 3.1
N-7711 Renting and leasing of cars and light motor vehicles 5 7 25.2 38 48 25.2
N-79 Travel agency, tour operator reservation service and related activities¹ 12 14 23.3 27 103  
Other fields of activity 61 63 3.9 366 394 7.5
¹Since the beginning 2016, some economic activities are no longer exempt from VAT, e.g. travel agencies (section N) and certain types of passenger transportation (section H).
²Most farmers report VAT every 6 months. Hence data in two-month buckets are not a good indicator of trends in agriculture.


Increased turnover in activities related to tourism
The turnover increased in most activities related to tourism, e.g. the turnover in “Accommodation and food services” increased by 25.9% in May 2016 to April 2017 compared to the same period in 2016. In the same period, turnover in car rental increased by 25.2%. Turnover in car rental is now almost as high as in agriculture.

Travel agencies and land passenger transport were not subject to VAT before 2016, and thus comparing turnover including these activities in 2016 with turnover excluding these activities prior to 2016 would be misleading. Turnover in the category “Travel agency, tour operator and other reservation service and related activities” increased by 23.3% in March to April 2017 compared to the same period in 2016.

There was a marked increase in turnover in the activities “Construction, mining and quarrying” (33.1%) and “Wholesale and retail trade and repair of motor vehicles and motorcycles” (11.0%). This increase might be partly due to the boom in the tourism industry.

More detailed data and data further back in time can be found in web-tables.

Turnover in fishing and fish processing decreased
The turnover in fishing and fish processing was 15.7% lower in the period May 2016 to April 2017 than in the preceding 12 months. During the same period, the turnover in wholesale of fish decreased by 14.4%. The decrease is due the strengthening of the Icelandic currency and to the recent strike.

Table 2: VAT-turnover May 2016 to April 2017, by VAT-rate (ISK billions)
  Zero rate Reduced rate Standard rate Total
Total 1,266 (31%) 896 (22%) 1,951 (47%) 4,113 (100%)
A-01/A-02 Agriculture and forestry 10 (20%) 10 (20%) 31 (60%) 51 (100%)
A-03/C-102 Fishing, aquaculture; fish processing 212 (66%) 95 (30%) 14 (4%) 320 (100%)
C-24 Manufacture of basic metals 203 (99%) 0 (0%) 1 (1%) 205 (100%)
C Manufacturing excluding fish processing (10.2) and manufacture of basic metals (24) 163 (35%) 135 (29%) 174 (37%) 472 (100%)
D/E Electricity, gas;  water supply; sewerage and waste management 5 (3%) 25 (15%) 134 (82%) 164 (100%)
F/B Construction, mining and quarrying 5 (2%) 1 (0%) 290 (98%) 296 (100%)
G-45 Wholesale and retail trade and repair of motor vehicles and motorcycles 10 (6%) 0 (0%) 153 (94%) 163 (100%)
G-46171/G-46172/G-46381 Wholesale of fish and fish markets 152 (74%) 45 (22%) 9 (5%) 207 (100%)
G-4671 Wholesale of fuels 24 (21%) 6 (6%) 85 (74%) 116 (100%)
G-46 Other wholesale 29 (8%) 92 (27%) 221 (65%) 341 (100%)
G-47 Retail trade 19 (4%) 183 (42%) 232 (53%) 435 (100%)
H Transportation and storage 328 (77%) 25 (6%) 74 (17%) 426 (100%)
I Accommodation and food service activities 5 (3%) 169 (93%) 8 (4%) 181 (100%)
J Information and communication 40 (21%) 16 (8%) 136 (71%) 192 (100%)
N-7711 Renting and leasing of cars and light motor vehicles 1 (1%) 0 (1%) 47 (98%) 48 (100%)
N-79 Travel agency, tour operator reservation service and related activities 15 (15%) 81 (79%) 7 (6%) 103 (100%)
Other fields of activity 45 (11%) 14 (4%) 335 (85%) 394 (100%)



Turnover by VAT-rate
The higher VAT-rate, or standard rate, is now 24%. All goods and services are scope to this rate unless otherwise specified in the law on VAT (law no. 50 from 1988).

The lower VAT-rate is now 11%. Examples of goods and services in this category include: books, newspapers, house-heating, food, restaurants, accommodation services, and domestic passenger transport (excluding public transport). Alcohol is subject to the lower VAT-rate since 1 January 2016.

A zero-rated supply falls within the scope of the VAT Act, but no output VAT is charged since the rate is zero. This category includes export of goods and services, and contractual payments from the Treasury related to the production of milk and sheep farming.

Some services are exempt from VAT, e.g. public transport, medical services, athletic activities, museums, postal services, and lotteries. The suppliers of such services cannot charge VAT or get credit for input VAT on purchases for the exempt (part of the) business.

More information on VAT can be found on the homepage of the Directorate of Internal Revenue.

Revision of statistics
At the time of our previous press release, in May, the VAT turnover in January to February 2017 was estimated 548.7 billion ISK which was a decrease of 0.6% compared to the same period in 2016. At present, more data are available and the VAT turnover in January to February 2017 is estimated 552.6 billion ISK which is an increase of 0.1% compared to the same period in 2016.

Other statistics on business economy
Statistics Iceland publishes annual income and balance statements of enterprises by activity, based on tax returns, providing a detailed picture of the individual sectors.

Statistics:
  Tourism industry
  All economic activities