Vehicle Expense Deductions in Iceland — RSK 4.03 Guide (2026)
Iceland uses an annual system: business mileage % × total car costs. Couriers and construction contractors can save 300,000–700,000 ISK per year.
TL;DR
You cannot deduct fuel or car maintenance monthly. Instead, Iceland uses an annual system: track your total mileage vs. business mileage, then deduct that percentage of all car costs via RSK 4.03. A courier driving 60% for work can save 300,000–700,000 ISK per year. FreelancePay Pro tracks this automatically.
1. The Key Rule: No Monthly Fuel Deductions
Unlike many countries, Iceland does NOT allow direct monthly deduction of fuel or maintenance. Instead, an annual calculation via RSK 4.03 — filed with your tax return (skattframtal) — is used.
The formula:
Business km ÷ Total km = % → × Total car costs = Deduction
2. What Counts as Business Mileage?
✅ Counts as business mileage
- • Driving to/from clients
- • Delivery routes (Wolt, couriers)
- • Driving to job sites
- • Business-related errands
❌ Does NOT count
- • Commuting to a regular workplace
- • Personal errands
- • Leisure trips
- • Unverifiable trips
Must be provable: mileage log (akstursdagbók) with date, destination, km, and purpose.
3. How to Fill Out RSK 4.03 — Step by Step
Section A: Vehicle details
Registration number, purchase price, year of purchase
Section B: Total km driven in the year
Odometer reading at year start vs. year end
Section C: Business km driven
From your mileage log
Section D: Business percentage
C ÷ B (e.g. 18,000 ÷ 25,000 = 72%)
Section E: Deductible costs
Insurance, depreciation (set by tax authorities), maintenance & repairs, fuel, parking & tolls
Section F: Your deduction
E × D (business %)
4. Example: Wolt Courier
17.000 kr
back in your pocket / month
(204,000 ISK ÷ 12 months)
5. Example: Construction Contractor
6. How to Keep a Mileage Log
- Digital apps are fine — FreelancePay Pro has built-in tracking
- Minimum required: date, start/end location, km, business purpose
- Take odometer photos at year start and end
- Tax authorities can audit — incomplete logs = denied deduction
FreelancePay Pro Tracks Vehicle Expenses Automatically
Mileage log, annual summary, and RSK 4.03 calculation — all in one place. No spreadsheets, no mistakes.
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