Those who intend to dwell in this country for a year or a shorter period for employment, study or travel may import a vehicle registered abroad without having to pay duty or import charges, provided that these conditions are fulfilled:
Travelers are also permitted to import, following the same conditions, other vehicles than automobiles e.g. motorcycle, caravans, campers and trailers.
The director of customs can ask the importer for documentation, e.g. a temporary employment contract or a temporary lease contract, proving that he only intends to stay in the country temporarily and no longer than a year.
Director of customs in the district where the vehicle is unloaded from the freighter or a ferry is in charge of registration and surveillance of above mentioned vehicles.
If the importer decides to reside here permanently or for a longer period than one year, he does no longer meet the conditions for temporary duty free importation of the vehicle. He must present himself to the director of customs in his place of residence and tell him of this decision. Then the final customs clearance must be made for the vehicle or the vehicle must be exported out of the country.
A vehicle registered in the following countries are considered to have a valid automobile insurance in Iceland; Austria, Belgium, Denmark, Faroe Islands, Estonia, Finland, France, Monaco, Greece, Netherlands, Ireland, Italy (The Holy See and San Marino), Croatia, Cyprus, Latvia, Lithuania, Luxemburg, Malta, Norway, Portugal, Poland, Slovak Republic, Slovenia, Spain, Switzerland, Liechtenstein, Britain, Northern- Ireland (Alderney, Guernsey, Jersey, Isle of Man and Gibraltar), Sweden, Czech Republic, Hungary and Germany.
If not listed above, importer must produce a valid international automobile insurance (Green card).
The importer must fill out a special form headed: "Declaration for Temporary Duty Free Importation of a Motor Vehicle/Vessel". In this document he will give certain general information about himself and the vehicle and that he is aware that he is not permitted to dispose of it by loaning it or selling it to a third party, and additionally undertaking to export the vehicle or pay the charges stipulated by law before the permit expires. When exporting a vehicle the importer must take care to submit to the customs a copy of this declaration (the green copy).
The director of custom can ask the importer to produce specific identifications to validate his information. E.g. the registration certificate of the vehicle, drivers license, a proof of his legal possession of the vehicle (e.g. a copy of the car rental agreement)m insurance certification, certification of the importers domicile abroad and if appropriate a bill of lading and a notice of the freight charges. These documents he will get from the office of the company which transported the vehicle to the country.
Before a final customs clearance is granted, a permanent registration number for the vehicle must have been obtained from the Icelandic Vehicle Inspectorate Ltd.
People are urged to be in good time for the final customs clearance of a vehicle. It should also be noted that a vehicle is cleared through customs according to the customs rate of exchange valid at the time of arrival of the importer, if the final customs clearance takes place within one month from the vehicles arrival to the country. If more than one month has passed, the vehicle will receive customs clearance according to a new customs rate of exchange and the same applies when the selling rate of exchange for foreign currency has increased by 5% or more.
Temporary exemptions for tourist operators:
Travel agencies and others, who's profession is planning of group tours around Iceland, are allowed to import a tour bus, registered abroad for use for the activities of a specific group of tourists, domiciled abroad, without paying duties, provided that the tour bus will be exported when the tourist group leaves the country.
Duty free importation of fuel
Duty free importation of fuel contained in built in fuel tanks of vehicles is permitted, the maximum quantity is 200 liters.
Duty free importation of spare parts.
If the above mentioned vehicle breaks down or is damaged it is permitted to import, without paying duties, spare parts for the vehicle.
Special attention is drawn to the condition that it is prohibited to sell the vehicle unless a prior payment has been made of the import charges stipulated by law. It should also be noted, that a vehicle, which has not received a complete customs clearance, serves as a pledge for the import charges and if an importer abuses these customs privileges the vehicle may be seized and sold at a public auction to cover the import charges.
Driving in Iceland (video)