Icelandic search and rescue association calls for tax relief amid high operation costs

The chairperson of Landsbjörg, the national association for search and rescue in Iceland, has expressed concern over the high taxes paid by volunteer organizations, which often exceed the amount they receive in government funding. During summer, these groups are required to purchase large quantities of oil for rescue vessels due to frequent calls for assistance and must pay value-added tax (VAT) on this fuel.

The Icelandic rescue teams must fully pay the VAT on oil and gasoline used during rescue operations and training exercises. Landsbjörg has long campaigned for tax exemptions. Borghildur Fjóla Kristjánsdóttir, the chairperson of Landsbjörg, highlighted the struggle, especially now as rescue vessels are almost daily engaged in missions due to sea fishing.

The rescue teams can purchase dyed diesel oil and receive a reduction on gasoline taxes, but still have to pay full VAT on both. Even though there is a reduced tax rate on rescue equipment for larger purchases, other operating goods and housing renovations are still subject to full VAT. According to Borghildur Fjóla, the organization pays more tax to the state than it receives in support.

For example, the rescue team Gerpir in Neskaupstað sent its rescue vessel, Hafbjörg, on four missions this summer. They used approximately 2,100 liters of oil for these missions, which cost around 420,000 krónur ($3,290). Of this, about 80,000 krónur ($626) was tax. The team rescued or assisted four people, which means they paid over 20,000 krónur ($156) in tax per life saved.

Borghildur Fjóla stated it’s unjust that volunteer rescue organizations, which rely on their own finances, have to pay as much tax as the reality suggests. She noted that the frequent missions result in high fuel costs and suggested that removing the VAT could make a significant difference.