A Brief Overview of the Icelandic Music Market



1. Introduction to the Market

Population: 323,000
GDP per capita: USD $47,000

Iceland is an extremely small country with 65% of the population living in the capital region of Reykjavik. As a consequence, there is no ‘music industry’ to speak of in a traditional sense – although Icelandic artists have managed to gain international acclaim for over three decades.

Due to the lack of music businesses, Iceland’s music community is very DIY-based and artist-led. There are a number of of festivals around the country, while most key venues are in Reykjavik. Bookings tend to come from the Icelandic promoters and venues, rather than from external bookers.

2. Record Labels, Licensing and Distribution

There are a small number of record labels in Iceland, and only a handful of these (eg Bedroom Community) operates on an international level. Most labels release product domestically or have digital-only international distribution.

The key labels are:
12 Tónar
Bedroom Community
Möller Records
Record Records
Smekkleysa SM/Bad Taste SM

3. Publishing and Performance Rights

There are no publishing companies in Iceland.

STEF is the performing rights organisation in Iceland and it retains a strong association with the other Nordic CMOs.

4. Management

Most Icelandic managers are independent, and the number of managers working internationally from Iceland is very low.

5. Live

5.1 Venues

6. Media, PR and Promotion

6.1 TV
RÚV is the national broadcaster. Other channels are Skjáreinn and Stöð 2.

6.2 Radio
RÚV is also dominant on the radio with Rás 1 and Rás 2. Rás 1 plays mostly classical music and jazz and Rás 2 plays more pop and rock.

Bylgjan Top 40
FM957 Top 40
Xið 977 (rock)
Flass FM (EDM/pop)
FM Extra (dance)

6.3 Online Media
Grapevine.is (English)

6.4 Print
Fréttablaðið (same as vísir.is)
Morgunblaðið (same as mbl.is)
DV (same as dv.is)
Grapevine (English)

6.5 PR-agencies
Very few that work with music, but one is.


7. Taxation

7.1 Value-added tax (VAT)
The standard value-added tax rate in Iceland is 24%. The lower rate is 11% and applies to foodstuffs, restaurants and hotels.

CD’s and other recordings are VAT free.

If a business sells and delivers goods or services from another state to customers in Iceland to a value of ISK 1,000,000 or more in any twelve-month period, then they are required to register and account for VAT in Iceland.

If a business supplies electronically supplied services to consumers in Iceland, to a value of ISK 1,000,000 or more in any twelve-month period, then they are required to register and account for VAT in Iceland. Registration is not required when the buyer is a company and can account for the VAT as part of the input tax.

For the purpose of registration, an Icelandic VAT representative is needed.

You can access the registration form on the Icelandic tax authorities’ (RSK) web site. (PDF 142 KB)

7.2 Importation of goods to Iceland
The customs authorities will calculate and determine the customs duties and import VAT at the time of importation. The declared consignee of the goods is responsible for the payment of customs duties and import VAT.

7.3 Importation of services to Iceland
If a foreign company performs physical services in Iceland, they will have to register and charge VAT.

The Icelandic buyer of a service from abroad shall pay VAT on the service price (reverse charge). 

The same applies to the service of a foreign party in Iceland, provided the foreign party does not operate a venue for business or have an agent in Iceland. This is intended to reduce any VAT advantage of buying those services from outside Iceland. 

The reverse charge applies on a wide range of services. For example: 

• the purchase and lease of copyright, patent rights, registered trademarks and copyrighted designs and the sale or lease of other comparable rights 

• advertising services 

• services of consultants, engineers, lawyers, accountants and other similar specialised services 

• computer services, other data processing and the transfer of information

7.4 Income and source-tax
If you are working or performing in Iceland as an artist and stay in the country for less than 183 days during any twelve month period, you have limited tax liability. This means your income is eligible for tax in Iceland.

If you are performing in Iceland as an artist and invoicing your employer (ie. You’re acting as a company), then you are obliged to pay 20% income tax. The tax rate for individuals who are not represented by a company or agency is 18%. Indivisuals also pay municipal tax.

7.5 Royalties and other copyright related transactions
For foreigners with limited tax liability, the gains from royalties and other copyrighted material are also taxed. Individuals pay 20% income tax and 14.
44% municipal tax; whereas companies pay 20% income tax and no municipality tax.

It is recommended that you check best practices with your accountant.

Useful and practical tax information about taxation of Nordic citizens in all Nordic languages can be found on Nordisk eTax.

Sources and additional information (in English and Swedish):