Car rental companies could have to pay up to ISK 25 billion

Iceland Revenue and Customs may demand a total of up to ISK 25 billion from several car rental companies over allegedly unpaid VAT on insurance they sold to their customers. Up to eight car rental companies received letters about the issue from Iceland Revenue and Customs earlier this year, and the sum comprises the principal amount of the VAT, together with surcharges and interest going back six years. It should be noted and emphasised that Iceland Revenue and Customs has not made a decision on this reassessment, but could do so. Kristinn Jónasson is a tax lawyer at KPMG who represents some of the car rental companies. He says they acted in good faith and believed they did not need to pay VAT on insurance they sold. The car rental companies had sought Iceland Revenue and Customs's opinion on the matter. That is why this is rather unusual, to come along nine years later and 'catch people in bed', or try to - make some attempt to - when people have been following the guidance of the same authority that then intends to come after them and completely bury them. Kristinn says that if Iceland Revenue and Customs demands this money from the car rental companies, it could become one of th