Iceland’s Ministry of Finance and Economic Affairs submitted a bill to parliament on 22 October 2024 proposing introducing a mileage tax on fossil fuel-powered vehicles. The bill aims to eliminate excise duties on fuels and vehicles while proposing doubling the carbon tax.
The draft went through a public consultation until 20 October 2024. The bill introduces a mileage tax based on vehicle weight and road wear, starting 1 January 2025; proposed amendments to the excise duty law to abolish the excise duty on vehicles and fuels; and the environmental and resource tax will also be amended to almost double the carbon tax.
Vehicles in Iceland for over 30 days will incur a mileage fee based on odometer readings at arrival and departure. Additionally, vehicles that weigh 10,000 kg or more must pay a mileage fee regardless of stay duration.
The table below outlines the rate structure for the mileage tax.
| Allowed total weight (kg) | Mileage tax (ISK) |
| 0-3,500 | 6.7 |
| 3,501-5,000 | 9.5 |
| 5,001-6,000 | 10.07 |
| 6,001-7,000 | 10.67 |
| 7,001-8,000 | 11.31 |
| 8,001-9,000 | 11.99 |
| 9,001-10,000 | 12.71 |
| 10,001-11,000 | 13.48 |
| 11,001-12,000 | 14.28 |
| 12,001-13,000 | 15.71 |
| 13,001-14,000 | 17.28 |
| 14,001-15,000 | 19.01 |
| 15,001-16,000 | 20.91 |
| 16,001-17,000 | 23.01 |
| 17,001-18,000 | 25.31 |
| 18,001-19,000 | 26.39 |
| 19,001-20,000 | 27.53 |
| 20,001-21,000 | 28.71 |
| 21,001-22,000 | 29.95 |
| 22,001-23,000 | 31.24 |
| 23,001-24,000 | 32.58 |
| 24,001-25,000 | 33.98 |
| 25,001-26,000 | 35.44 |
| 26,001-27,000 | 36.68 |
| 27,001-28,000 | 37.96 |
| 28,001-29,000 | 39.29 |
| 29,001-30,000 | 40.67 |
| 30,001-31,000 | 42.09 |
| 31,001 and above | 43.9 |
