Lena Savoie
Alcohol in Iceland is heavily taxed, and the higher the alcohol percentage content, the higher the tax. As a result, travellers are advised to stock up on alcohol at duty-free shops before entering the country. While some sources suggest that alcohol prices at duty-free shops in the UK are comparable to high-street prices, others claim that duty-free alcohol in Iceland can be up to 30% cheaper than prices at state-owned stores.
| Characteristics | Values |
|---|---|
| Alcohol taxes in the UK and Iceland | Alcohol is heavily taxed in Iceland. Taxes are levied based on alcohol volume, so the more alcohol per volume, the higher the tax. Alcohol taxes in the UK are not mentioned in the sources. |
| Duty-free alcohol prices in Iceland | Up to 30% cheaper than in state-owned stores. |
| Duty-free alcohol prices in the UK | Similar to high-street prices in the UK, if not slightly more expensive. |
| Buying duty-free alcohol in Iceland vs. the UK | It is recommended to buy duty-free alcohol in Iceland, as it is likely to be cheaper than in the UK. |
| Payment methods in Iceland | Debit and credit cards are the most popular payment methods in Iceland. Cash is no longer commonly used. |
Explore related products
What You'll Learn
Alcohol is heavily taxed in Iceland
Alcohol is notoriously expensive in Iceland due to high taxation. In fact, Iceland has some of the highest alcohol taxes in the world. In 2019, Iceland's alcohol taxes were the highest in Europe. Compared to Norway, a neighbouring country with high alcohol taxes, Icelandic taxes are on average 28.8% higher, with taxes on fortified wines, such as port and sherry, a significant 89% higher.
The high taxes are due to the fact that taxes on alcohol in Iceland are a fixed ISK amount based on the alcohol percentage. This means that cheaper wines become proportionately more expensive than expensive ones. As a result, 84.4% of the price of a bottle of vodka is due to taxes.
The Icelandic government has continued to increase alcohol taxes in recent years. The 2023 budget proposed a 7.7% increase in alcohol tax, which would have raised alcohol taxes to 25%, a 150% increase. This has been criticised by the restaurant industry, which claims that the high taxes will make Iceland a less attractive tourist destination and put unnecessary stress on the industry.
The high taxes on alcohol in Iceland have also been criticised by some as disproportionately affecting lower-income individuals and leading to "nonsensical" levels of taxation on a single consumable good.
Where Should You Dump Alcohol?
You may want to see also
Explore related products
Duty-free alcohol prices in the UK and Iceland
Alcohol in Iceland is known to be expensive due to high taxes levied based on alcohol volume. As a result, travellers often seek to purchase alcohol from duty-free shops in airports to save money. In Iceland, duty-free shops like Duty-Free Iceland at Keflavík International Airport offer a wide range of alcoholic beverages at competitive prices. However, it's important to note that each traveller is permitted only six units of alcohol.
When comparing duty-free alcohol prices in the UK and Iceland, it's important to consider the regulations and price variations. In the UK, duty-free shops may offer similar prices to high street retailers or even slightly higher prices. On the other hand, duty-free alcohol prices in Iceland can be significantly lower than state-owned stores, sometimes by upwards of 30%. This makes duty-free shopping in Iceland a more attractive option for price-conscious travellers.
According to some travellers, it may be more convenient to purchase duty-free alcohol in the UK before departing for Iceland. This is because the selection and prices at UK airports can be more favourable than those in Iceland. Additionally, UK duty-free shops offer a wider range of products, making it easier to stock up on alcohol and other items before travelling to Iceland.
It's worth noting that regulations and prices can change over time. Some travellers have noted that duty-free prices upon arrival in Iceland may be higher than those at departure from the UK. Therefore, it is recommended to check for the latest information and regulations before planning any purchases.
While duty-free shopping can offer savings, it's important to be mindful of the quantity and purpose of your purchases. Duty-free allowances and regulations may vary between countries, and it's essential to adhere to the laws and restrictions of both the UK and Iceland. Additionally, travellers should be aware of the permitted amount of duty-free alcohol they can bring into each country to avoid any issues with customs.
Exploring Alcohol: First-Time Drinker's Guide
You may want to see also
Explore related products
Alcohol allowance in duty-free Iceland
When travelling to Iceland, there are regulations regarding duty-free imports that travellers should be aware of. While duty-free shopping can be a great way to save money, it's important to understand the allowances and restrictions in place.
Firstly, it's important to note that customs exemptions apply only to goods that are intended for the personal use of the traveller, their family, or as gifts. Goods intended for sale or other commercial purposes cannot be imported duty-free. Travellers must declare any goods that do not qualify for duty-free exemption to a customs officer upon arrival in Iceland.
In terms of specific allowances, travellers residing in Iceland can bring duty-free luggage that they had with them abroad. Additionally, they can import one or more items of duty-free goods worth a total of up to 88,000 ISK, with the purchase price determined by the place of purchase. For children under 12 years of age, the duty-free allowance is half of that amount. It's important to note that these regulations do not provide exemptions from import restrictions or prohibitions on certain types of articles, as outlined by laws and administrative instructions.
When departing from Iceland, travellers must take with them any articles they imported duty-free unless they have been used up during their stay. Additionally, travellers must voluntarily declare any cash amounts exceeding EUR 10,000 upon arrival in or departure from the country.
It's worth noting that duty-free allowances cannot be assigned to travel agencies, tour guides, bus drivers, or similar entities. If such entities import goods on behalf of travellers, duties must be paid according to the invoice of the goods.
The Angel's Share: Is Grain Alcohol the Answer?
You may want to see also
Explore related products
State-owned alcohol stores in Iceland
In Iceland, alcohol sales are regulated by a state monopoly. The State Alcohol and Tobacco Company of Iceland (ÁTVR) is a state-owned company that serves as the sole legal retail vendor of alcohol in the country. It operates a chain of 51 retail stores called Vínbúðin (which translates to "the wine shop"), colloquially referred to as Ríkið ("The State"). These state-run liquor stores are the only shops allowed to sell alcohol over the counter, apart from breweries, which are now also permitted to sell directly to consumers.
Vínbúðin stores are open Monday to Saturday, with larger stores offering a wide selection of liquor, beer, and wine, while smaller ones tend to stock only the staples. Their operating hours vary by location, with stores in rural villages usually having shorter opening hours. The legal drinking age in Iceland is 20 years old for purchasing and consuming alcohol.
The country's alcohol policies have received praise from the World Health Organization (WHO), which recognizes the state monopoly on retail sales as a successful strategy for reducing excessive alcohol consumption. Iceland has high taxes on alcohol, with tax rates being proportional to the alcohol content. These taxes serve the dual purpose of reducing alcohol consumption and generating government revenue. As a result, alcohol prices in Iceland are among the highest in Europe, and many visitors are surprised by the cost of drinks at bars and clubs in Reykjavik. Consequently, some locals and tourists opt to purchase duty-free alcohol at Keflavík Airport upon arrival to save money.
Alcohol Problems in the US: A Startling Number
You may want to see also
Explore related products
Tips for saving money in Iceland
Iceland is a beautiful country to visit, but it can be expensive. Here are some tips to help you save money on your trip:
Accommodation and Transport
- Stay in hostels, or guesthouses that offer a kitchen so you can prepare your own meals.
- Book a rental car and plan budget self-drive tours instead of booking organised tours.
- Use public transport or the Flybus instead of taxis.
Food and Drink
- Dining out in Iceland is expensive, so be selective about where and when you eat.
- Shop for groceries at local stores like Bónus and Krónan, and avoid more expensive stores like 10/11 and Kvosin Supermarket.
- Take advantage of happy hour specials and discounts at bars and restaurants.
- The tap water in Iceland is of excellent quality, so bring a reusable water bottle and fill up for free.
- Bring snacks, tea bags, and coffee with you.
Other Tips
- If you prefer to use cash, bring credit cards with no foreign transaction fees to avoid unnecessary charges.
- Guide to Iceland offers access to the VIP Club, which provides exclusive discounts at restaurants, cafes, bars, and stores across the country.
Confronting an Alcoholic: A Delicate Balance
You may want to see also
Frequently asked questions
Alcohol is heavily taxed in Iceland, so it is recommended to stock up on alcohol at duty-free shops before entering the country. While prices at UK departure duty-free shops are similar to UK high-street prices, alcohol in Icelandic duty-free shops can be upwards of 30% cheaper than in Icelandic state-owned stores.
Duty-free shops in Iceland are available at Keflavík International Airport, Iceland's main airport.
Yes, each traveller is only permitted to buy six units of alcohol at duty-free shops in Iceland.
Yes, you can try to catch happy hours at bars, or visit breweries that now legally sell alcohol directly to customers.
