The Icelandic parliament (Althingi) approved the Law Amending the Value Added Tax Act and the Competition Act (Fuel Tax Rate) on 29 April 2026. The law provides for a temporary reduction in the VAT rate on the import and sale of specified fuels (gasoline, diesel, biofuels, etc.) from 24% to 11% with effect from 1 May to 31 August 2026. Provisions are also included to ensure that the VAT reduction is passed on to consumers.