Iceland VAT Guidelines for Podcasters: Key Insights

As the number of podcasts worldwide increases and more individuals and businesses decide to engage with their audience and consumers in this format, the profitability of having a podcast is not neglectable. With large audiences, podcasters can advertise and sell products and services, thus generating income.

That is why the Icelandic Tax Administration decided to clarify applicable VAT rules and issue guidelines for podcasters.

Purpose and Scope of Guidelines

The VAT guidelines for podcasters explain what is considered taxable income and when podcasters need to register for VAT in Iceland. 

Since podcasters are commonly used as advertising mediums and cooperate with companies and brands to promote their products and services for a fee, the Tax Administration recognized several types of taxable podcast income.

Advertising or subscription sales, payments from streaming providers, income from live events, facility rentals, such as renting out recording studios or equipment, and merch sales are taxable podcast income. However, these are just some of the activities recognized as taxable, and the list stated by the Tax Administration is not exhaustive.

The Tax Administration also clarified that it does not matter whether podcasters receive a fee in cash or non-monetary payment in the form of goods, services, or loyalty, as all these forms of payment are equal to cash and, as such, represent taxable income.

Once the turnover exceeds ISK 2 million within 12 months, the podcaster must register for VAT and collect and remit VAT to the Tax Administration. The standard VAT rate of 24% generally applies, but in some specific cases of the sale of goods and services, it is subject to 11% VAT.

Conclusion

It has been 20 years since the first podcast appeared, and from that moment, a whole new industry and profession arose. Now, in the digitized and highly connected world we live in, the influence of podcasters is greater than ever.

The revenue and income they generate are no longer overseen. They are becoming more regularized; this is just one example of how Iceland deals with this matter.

Source: Bloomberg, Iceland Tax Administration - Taxable podcasts