Living in Iceland
Information for British nationals residing in Iceland, including advice on health, education, benefits and residence requirements.
This guide sets out essential information for British nationals residing in Iceland including advice on health, education, benefits, residence requirements and more. We are unable to provide any guidance on general lifestyle enquiries apart from the information and links listed below. See how else we can help and what the embassy cannot do for you.
Everyone who has been legally resident in Iceland for six months automatically becomes a member of the Iceland social insurance system regardless of nationality. This applies unless intergovernmental treaties say otherwise. Children and adolescents under the age of 18 are covered for health insurance with their parents.
The UK European Health Insurance Card (EHIC) is valid for holiday makers and temporary visitors who need to use the health system while in another country. You will be treated on the same basis as a resident of Iceland. Remember, each country’s health system is different and might not include all the things you would expect to get free of charge from the NHS. This may mean that you have to make a patient contribution to the cost of your care. You may be able to seek reimbursement for this cost when you are back in the UK. It is important that you ensure that you are treated by a state healthcare provider as you will not be covered for private healthcare. You should be particularly careful if the healthcare arrangements have been made by a hotel or travel representative.
For medical assistance outside of hospital from a GP or specialist you will have to pay a minimum fee while the remaining cost is covered by the insurance. Dental treatment for persons between the ages of 18 and 67 is not covered by insurance. Dental treatment to children and adolescents under the age of 18 is partially reimbursed by insurance. Dental treatment is partially reimbursed for those over the age of 67.
Entry and residence requirements
If you have a UK passport endorsed British Citizen, British National Overseas or British Overseas Territory Citizen you do not need a visa for stay up to 3 months. Other types of British nationals will need a valid Schengen visa to enter Iceland. Iceland is a member country of the European Economic Area. British Citizens are entitled to live and work in Iceland with a residence/work permit, which you can get from the Directorate of Immigration.
Directorate of Immigration
Telephone: +354 510-5400
Registers Iceland (Þjóðskrá Íslands)
Registers Iceland is an office under the Ministry of the Interior which maintains the national register. Information about identification numbers, names, gender, marital status etc. of people who live or take up residence in Iceland is registered in the national register, as well as information about legal domicile, place of birth, citizenship and child bearing.
Registers Iceland also maintains a specific identification number register (kennitöluskrá) which is a register of people who have an Icelandic identification number but not legal domicile in Iceland. Registers Iceland receives notifications about change of address, domestically and from people moving to Iceland or abroad. If individuals wish to register their co-habitation they need to notify Registers Iceland. Registers Iceland also receives applications regarding name changes.
Citizens of EEA and EFTA member states need to fill out and submit a form to Registers Iceland to register legal residence in Iceland, as well as apply for a registration and get an identification number.
Registers Iceland issues various certificates, for example birth certificates, certificates about marital status, residence and death certificates. The Registers Iceland’s office is open from 9am to 3pm Monday to Friday or you can call on (+354) 515 5300 from 9:00am to 3.30pm Monday to Friday.
National identity number (Kennitala)
All individuals that establish permanent residence in Iceland must be registered in the National Registry and need an identification number (kennitala) that is a ten digit long number. The first six digits are your date of birth. It is necessary to have been issued an identification number in order to register legal residence in Iceland, get a tax card, open a bank account and apply for a home telephone and internet connection. See the Information for EEA and EFTA citizens about how to apply for an identification number
There is a good standard of education for all ages in Iceland. The system of education is divided into four levels: pre-school, compulsory, upper secondary and higher. Education is mandatory for children aged 6 to 16. The Ministry of Education, Science and Culture has the jurisdiction of educational responsibility, however over the years the system has been decentralised and responsibility for primary and lower secondary schools lies with the local authority. As immigration to Iceland has increased, schools have plans in place for pupils that speak languages other than Icelandic.
There are 170 institutions catering for compulsory education, 34 schools for upper secondary education, 7 institutions for higher education, in addition to 290 pre-schools.
Salaries are usually paid by bank transfer so it is important to open an account with one of the banks in Iceland. Different requirements apply when opening an account, depending on the bank. All banks in Iceland require that you have a registered address in Iceland and an Icelandic social security number (KENNITALA). Other requirements may differ depending on the banks’ procedure. The banks’ interest rate may vary as well as their service. Therefore it is wise to shop around and ask about the different services offered by the banks and whether they have a branch nearby before opening an account. Icelandic banks provide customers with internet banking where most bank transactions can be made and automatic teller machines (ATM) are located widely. The banks issue debit cards and credit cards, grant loans and overdrafts as well as offer counselling and financial services to their customers.
Banks in Iceland
Driving licences and vehicles
A foreign driver’s license is valid in Iceland for those who stay here on temporary basis. However, if a person has permanent residence in Iceland (normally legal domicile) he or she must hold an Icelandic driver’s license. Exceptions to the rule are as follows:
- Driver’s license issued in the Faroe Islands or countries that are parties to the EEA Agreement gives the holder the same rights he or she has under the license of the issuing country. The rights are based on the validity of the license, but no longer than to the age of seventy.
- Driver’s license issued in states that are not parties to the EEA Agreement gives the holder rights to drive in Iceland for up to one month after he or she has registered a legal domicile in Iceland. After that the person concerned must hold an Icelandic driver’s license in order to drive in Iceland.
All cars registered in Iceland must get a vehicle inspection regularly at an authorised vehicle inspection company to ensure that it conforms to regulations governing safety, emissions etc. Twice a year car owners must pay vehicle tax which depends on how much carbon dioxide the car releases while driving. Vehicle inspection companies are Frumherji, Aðalskoðun and Tékkland.
If a car is imported to Iceland the owner must pay duty or import charges if he or she resides in Iceland for over a year, see the Directorate of Customs website, register the car and take it for periodic vehicle inspection.
Everyone who works in Iceland must pay taxes. Taxes of salaries are divided into income tax to the state and local tax for municipalities. See the Multicultural and Information Centre website for more information. Income tax is divided into steps and the tax percentage is dependent on the wages of the worker. See the National Director of Taxation website for information on the withholding tax based on the amount of wages. An employer takes the withholding tax from the employee’s wages but the employee is entitled to a fixed tax rebate personal rebate each month. An employer cannot use the personal rebate granted by the tax card unless he has the tax card.
The tax authorities issue tax cards. A citizen of an EEA state who moves his legal residence to Iceland gets sent a tax card when his legal residence has been registered with the Icelandic National Registry. Paid taxes are stated on the pay slip. It is essential to keep the payslips to prove that taxes have been paid. Individuals who are married, confirmed same-sex union or registered cohabitation can jointly use their personal rebate. Further information can be found in the website of the National Director of Taxation.
Everybody who is liable to pay tax in Iceland must submit a tax return every year, usually in March. On the tax return you have to file the total income of the previous year, along with debts and assets. If you have paid too much or too little tax, it is rectified in August the same year as the tax return is filed. If you have paid less than is due you must pay the difference and if you have paid more you should get the balance repaid. The tax return is submitted online and a web key (user name and password) is sent to the legal residence of all taxpayers. If a tax return is not filed the Director of Taxation estimates the income and the dues are calculated accordingly. You can find a form for tax returns and a leaflet on taxation in Iceland in English, Finnish, Norwegian, Swedish, French, Spanish, German, Polish and Russian on the National Director of Taxation website.
Local tax is one of the municipalities’ sources of income, a certain percentage of which is collected from wages, regardless of the level of wages. The local tax percentage can be different between municipalities. The general tax rebate is a fixed amount which all workers get for tax rebate and is withdrawn from the tax payments of the worker. Detailed information about tax liability and taxation in Iceland, in various languages (English, Danish, Finnish, French, Chinese, Norwegian, Swedish, Russian, Spanish, Polish, German and Icelandic) can be found on the website of the Directorate of Internal Revenue (Ríkisskattstjóri).
Guidance on bringing medication to Iceland
Travellers can bring medication in their hand luggage, labelled with the user´s name, for the duration of their flight. Travellers can additionally bring personal prescription medicine (up to a 100 day supply) without a custom’s declaration. A formal doctor´s note may be requested by Icelandic customs officials. For individuals with health insurance, necessary (indispensable) medication is paid in full by Tryggingastofnun (the States Social Security Institution). The cost of other prescription drugs is paid partially by Tryggingastofnun (the State Social Security Institution) and this proportion is regulated by law. Individuals have to pay in full for other medication (medication that is not a prescription drug). Medication can be acquired and purchased in pharmacies.
Medication is sold in pharmacies alongside various commodities which usually relate to health in some way.
In addition to prescription drugs, over the counter medicine can also be purchased in pharmacies.
Pharmacies’ opening hours differ. However, Lyfja Lágmúla and Lyfja Smáratorgi are open until midnight every night.
Social ethics and traditions
To read more about Iceland, its traditions, culture, nature, society, business etc. please visit the Iceland Tourist Board website.
When leaving Iceland to move abroad, you must notify the population register with Registers Iceland and deregister with them.
The information is provided as a general guide and is based upon information provided to the embassy by the relevant local authorities and may be subject to change at any time with little or no notice. The FCO and the British Embassy will not be liable for any inaccuracies in this information. British nationals wishing to obtain any further information must contact the relevant local authority.