Iceland has regulated electronic invoicing and electronic accounting since 2013. Its public-sector framework now requires covered contracting authorities to receive and process structured e-invoices that comply with the European standard EN 16931.
This page provides an overview of Iceland’s B2B and B2G e-invoicing rules, its use of Peppol, key implementation dates and invoice-retention requirements. Be sure to bookmark it to keep up with regulatory developments.
E-invoicing for B2B transactions is voluntary in Iceland. There is currently no general regulation requiring businesses to exchange invoices electronically with other businesses.
The use of electronic invoices requires the recipient’s consent. This consent may be established through an agreement between the trading parties or through a unilateral declaration by the recipient identifying the electronic formats and transmission methods it accepts.
Businesses may agree on the electronic format and delivery method used, provided that the arrangement complies with Icelandic accounting and invoicing rules. This gives businesses greater flexibility than in regulated public-procurement transactions.
Electronic invoices used as accounting records must remain authentic and traceable. Businesses may determine how they satisfy these requirements. Permitted controls may include electronic signatures, secure transaction logs and appropriate accounting procedures. An advanced electronic signature or a particular form of EDI is not mandatory.
Covered public contracting authorities in Iceland must be able to receive and process structured e-invoices that comply with the European standard EN 16931. This obligation applies within the scope of Regulation 44/2019 on electronic invoicing in public procurement, subject to the regulation’s scope, procurement thresholds and limited exclusions.
Regulation 44/2019 primarily creates a receiving and processing obligation for public authorities. It does not establish a general statutory requirement for every private supplier in Iceland to issue e-invoices to the public sector.
However, individual government bodies may require their suppliers to submit structured e-invoices through procurement terms, contracts or invoicing policies. For example, Icelandic central-government organisations have operated a policy of accepting only compliant structured e-invoices since 1 January 2020.
The Peppol eDelivery Network is the principal channel used for exchanging structured B2G e-invoices in Iceland. Invoices submitted under the public-sector framework should comply with EN 16931 and the relevant Icelandic technical specification, TS-236.
Iceland has participated in the Peppol framework since 2020, with the Icelandic Financial Management Authority (Fjársýsla ríkisins or FJS), acting as the country’s Peppol Authority on behalf of the Ministry of Finance and Economic Affairs.
FJS supports Iceland’s implementation of the Peppol framework and oversees compliance with the national Peppol requirements applicable to participating service providers. Businesses normally connect to Peppol through an accredited Peppol service provider or Access Point.
The Peppol eDelivery Network is Iceland’s principal network for transmitting structured B2G e-invoices. Covered public contracting authorities must be able to receive and process invoices that comply with EN 16931, although this receiving obligation should not be interpreted as proof that every public body operates its own Peppol endpoint.
EN 16931 supports two principal XML syntaxes: UBL 2.1 and UN/CEFACT Cross Industry Invoice, or CII. Iceland uses the national technical specification TS-236, which defines the Icelandic implementation of Peppol BIS Billing 3.0 and includes rules reflecting Icelandic tax and business requirements.
Peppol BIS Billing 3.0 is a usage specification rather than a separate invoice syntax. Invoices exchanged through the Peppol network generally use the UBL syntax together with the applicable Peppol and Icelandic business rules.
Learn more about Peppol e-invoicing.
Iceland issues Regulation 505/2013, establishing rules for electronic invoices, electronic accounting, electronic document exchange, data storage and the authenticity and traceability of electronic accounting records.
The City of Reykjavík begins requiring structured electronic invoices from its suppliers, using the applicable Icelandic technical specification.
Regulation 44/2019 enters into force, implementing the receiving requirements of Directive 2014/55/EU for electronic invoicing in public procurement.
Covered central-government institutions must be capable of receiving and processing electronic invoices that comply with EN 16931 and the applicable Icelandic technical specification.
Icelandic central-government organisations begin operating a policy of accepting only compliant structured electronic invoices from suppliers.
FJS becomes Iceland’s Peppol Authority.
The receiving and processing deadline applies to covered municipalities, municipal institutions, public undertakings and other sub-central contracting entities within the scope of Regulation 44/2019.
Iceland isn’t the only country to have implemented e-invoicing requirements—in fact, most nations are on their own unique journey towards mandating the technology.
Ensuring compliance in one country can be taxing. Keeping on top of compliance across all countries you operate in can just be plain inefficient.
Unless you have a tax compliance partner to do the hard work for you. Sovos can help. Tax compliance is our business; we take care of it so you can focus on what truly matters.
There is no general B2B e-invoicing mandate in Iceland. For B2G transactions, covered public contracting authorities must be able to receive and process structured e-invoices that comply with EN 16931. However, Regulation 44/2019 does not create a general statutory obligation requiring every private supplier to issue e-invoices.
Individual government bodies may require e-invoicing through their procurement conditions, contracts, or invoicing policies. Suppliers should therefore confirm the requirements of the particular public authority with which they are doing business.
EN 16931 supports the UBL 2.1 and UN/CEFACT CII XML formats. Iceland uses TS-236 as its national format for public-sector e-invoicing. TS-236 defines the Icelandic implementation of Peppol BIS Billing 3.0 and includes rules reflecting Icelandic tax and business requirements.
For invoices sent through Peppol, suppliers should use the syntax and Peppol BIS Billing 3.0 profile supported by the recipient and their Peppol service provider.
Electronic accounting records and their supporting documents must generally be retained for seven years from the end of the relevant accounting year.
A general statement that all invoices concerning immovable property must be retained for 20 years should not be used without identifying the separate legal provision concerned. Longer recordkeeping periods may apply to particular VAT adjustment or property records, but these should be explained separately from the general invoice-retention rule.