Iceland plans nine changes to kilometer charge

Iceland’s Finance and Economic Affairs Ministry is preparing nine changes to the country’s kilometer-charge law after early experience with its implementation exposed a need for adjustments.

One proposal would give the director of internal revenue special authority to reduce a kilometer charge when it clearly rests on incorrect information and exceeds the amount that should have been imposed. Drivers would also be allowed to record a new odometer reading before 30 days have passed since the previous registration.

The planned amendments would prevent a previous owner’s unpaid kilometer charge from blocking a new owner from taking a vehicle for its main inspection. The ministry also wants to exempt vehicles used exclusively outside the public road network, including quarry vehicles, tracked vehicles operated off-road or in closed work areas, and vehicles used only in restricted airport areas.

The exemption for rescue teams would be clarified, while the possible exemption of light motorcycles remains under consideration. The kilometer charge would also be explicitly defined as an operating expense under income-tax law, and the law would state that it does not form part of the basis for value-added tax. The ministry expects the financial effect on state revenues to be negligible.