Tax-free shopping in Iceland is a great way to save money on your trip, especially if you’re planning to bring home quality Icelandic products like wool sweaters, outdoor gear, skincare, or local design. With a little planning, you can get a significant portion of the VAT (value-added tax) refunded at the airport before you fly home. Here are some practical tips to make the most of tax-free shopping while staying with Ourhotels.is in West Iceland.
First, it helps to understand how tax-free shopping works in Iceland. As a non-resident visitor, you can claim a VAT refund on many goods you buy in shops that participate in the tax-free system. The key points are: you must spend over a minimum amount in a single store (usually around 6,000 ISK including VAT, but check the exact threshold in each shop), the goods must be taken out of Iceland unused or lightly used, and you must export them within three months of purchase. Services like tours, restaurant meals, or hotel stays are not eligible—this is mainly for physical goods.
When you’re exploring West Iceland from Ourhotels.is properties, look for “Tax Free” or “Tax Refund” signs in shop windows and at the counter. Many clothing, outdoor, design, and souvenir shops in Reykjavík and around the country participate. In Borgarfjörður, while staying at Hvítá Inn near Borgarnes, you’ll find local shops and boutiques where you can buy Icelandic wool products, handmade crafts, and outdoor gear. Ask the staff if they offer tax-free forms; most are used to helping visitors and will guide you through the process.
Always remember to ask for the tax-free form at the time of purchase. The shop will either print or handwrite a special receipt and form that includes your purchase details, passport information, and the refund amount. Keep this form together with the original receipt. Don’t pack these documents deep in your luggage—keep them in your hand luggage along with the items you plan to claim a refund on, as customs may want to see both the goods and the paperwork at the airport.
If you’re traveling around the Snæfellsnes Peninsula and staying at The Stykkishólmur Inn, you’ll have great opportunities to buy local design items, ceramics, and artisan products in Stykkishólmur and nearby towns. These make excellent tax-free purchases because they’re easy to transport and often have a higher value, which means a more noticeable refund. When you shop, try to consolidate your purchases in fewer stores and exceed the minimum amount in each one, rather than spreading many small purchases across many shops. This way, you’ll get more usable tax-free forms and less paperwork to manage.
In Ísafjörður, while staying at Ísafjörður Inn, you can explore small boutiques, outdoor shops, and specialty food stores. Items like high-quality outdoor clothing, fishing gear, and local delicacies packaged for export can often be bought tax-free. Just make sure that food items are allowed into your home country and that they’re properly sealed and labeled. Again, ask the shop staff to prepare the tax-free form and confirm which refund company they use, as this will determine where you claim your money back at the airport.
Timing is important. At Keflavík International Airport, you’ll find tax refund counters and drop boxes in the departure area. Plan to arrive a bit earlier than usual if you have several forms to process, especially in high season. Before you check in your luggage, go to the customs or tax refund desk with your forms, receipts, passport, and the goods. In some cases, customs officers may want to see the items to confirm they’re leaving the country. After they stamp your forms, you can proceed to the refund counter or follow the instructions for getting your money back (cash, card refund, or bank transfer, depending on the provider).
To make the process smoother, keep these simple habits during your stay with Ourhotels.is: store all your tax-free receipts and forms in one envelope, note which items correspond to which form, and avoid using or wearing the goods too heavily before departure. Light use is usually fine, but items should still look new and clearly be exportable. If you’re unsure, ask the shop staff or the reception at Hvítá Inn, The Stykkishólmur Inn, or Ísafjörður Inn—they can often clarify what’s typical for Icelandic customs.
Another useful tip is to prioritize higher-value items for tax-free purchases. Icelandic wool sweaters, quality rain jackets, hiking boots, and designer pieces often come with a higher VAT amount, so the refund is more noticeable. Smaller souvenirs are lovely, but the refund on very low-cost items may not justify the extra paperwork. Combining a few meaningful, higher-quality purchases with the tax-free system is usually the most efficient way to save.
While staying at Ourhotels.is properties across West Iceland, you’re perfectly placed to explore both nature and local shopping. From Hvítá Inn near Borgarnes, you can visit local wool shops and farm boutiques in Borgarfjörður. From The Stykkishólmur Inn, you can discover creative studios and design shops around the Snæfellsnes Peninsula. From Ísafjörður Inn, you can pick up specialized outdoor gear and unique Westfjords crafts. In each area, look for tax-free signs, ask for the forms, and keep your documents organized.
By combining smart tax-free shopping with comfortable stays at Ourhotels.is, you can enjoy Icelandic quality products at a better price and bring home lasting memories from your trip. With a bit of preparation—collecting forms, keeping receipts, and allowing extra time at the airport—you’ll make the most of Iceland’s tax refund system while exploring the best of West Iceland.
