VAT returns

This page helps you when the figures on the VAT return look wrong, when the return cannot be sent electronically to Skatturinn (the Icelandic tax authority), or when a return that has already been sent needs correcting. It also covers VAT settings: VAT rates, fiscal positions for foreign partners, prices with and without VAT, and input VAT that is entered by hand.

Input VAT entered by hand does not appear on the VAT return

You entered input VAT by hand, for example VAT paid at customs. The amount shows on the input VAT account in the books but is missing from the Innskattur (input VAT) line of the VAT return, or the amount there is wrong.

What could cause this

• The VAT return reads the tax grids on journal items, not account balances. Input VAT only reaches the Innskattur 24% and Innskattur 11% lines if the item carries the tax grid E24 or E11.
• The amount was posted straight to an input VAT account in a manual journal entry, without a tax. The item then has no tax grid and the return does not count it.
• The item has a tax that does not go on the return, for example Innkaup án VSK.
• A tax is set in the Default Taxes field of the input VAT account itself. When that account is used on a vendor bill line without a product, Odoo calculates VAT on top of the VAT amount.

What you can check

1. Open Accounting ‣ Reporting ‣ Taxes & Fiscal ‣ Tax Report, choose the period and compare the Innskattur line with the balance of the input VAT accounts.
2. Open the journal entry or vendor bill where the input VAT was posted and go to the Journal Items tab.
3. Look at the Tax Grids column on the input VAT account line. It should show E24 for the 24% rate or E11 for the 11% rate. If it is empty, the return does not count the line.
4. Record input VAT on purchases on a vendor bill in Accounting ‣ Vendors ‣ Bills, with a purchase tax on the line, for example Innkaup 24%, Rekstur 24% or Fastafjármunir 24%. Odoo then creates the VAT line itself with the right tax grid.
5. If you have administrator access to accounting: open the input VAT account in Accounting ‣ Configuration ‣ Accounting ‣ Chart of Accounts and check the Default Taxes field.

When to contact Exigo

Contact Exigo in these cases:

• You record VAT paid at customs, or other input VAT that does not come from a vendor bill. Exigo reviews how such input VAT is posted in your database.
• A line has no tax grid or the wrong one, and the VAT return for the period has already been validated.
• A tax is set in Default Taxes on an input VAT account.

Include the number of the journal entry or bill, the VAT period, and a screenshot of the Journal Items tab with the Tax Grids column visible.

The VAT return is not sent electronically to Skatturinn

You click Submit on the VAT return or Send in the dialog that sends the return to Skatturinn, and an error appears instead of the return being completed.

The dialog opens when you click Submit on the VAT return. It shows the period number and the return's amounts, and the return does not go to Skatturinn until you click Send.

What could cause this

• The web key is missing or wrong. Odoo signs in to Skatturinn with the company's kennitala and the web key. If the key is missing, “The web service key is not set.” appears. If Skatturinn has issued a new key, it has to be entered in Odoo.
• The company's kennitala or VAT number is missing or wrong. Both are sent to Skatturinn with the return.
• The return's period is not two months. Electronic filing from Odoo is for two-month periods: January and February, March and April, and so on. For any other period the error “Invalid period” appears as soon as you click Submit.
• Skatturinn rejects the return. The error message then starts with “Error in the response:” followed by Skatturinn's explanation. For example, Skatturinn does not accept a return where output VAT does not match taxable turnover.

What you can check

1. Write the error message down word for word, or take a screenshot of it.
2. If the error mentions the web key or signing in: a user with administrator access opens Settings ‣ Users & Companies ‣ Companies, selects the company and checks the Web Service Key field on the General Information tab. You get the web key from Skatturinn.
3. In the same place, check that the kennitala in the Tax ID field and the VAT number in the Company ID field are correct.
4. Open Accounting ‣ Accounting ‣ Closing ‣ Tax Returns and check which period the return covers. If it is one month or a quarter, contact Exigo.
5. If the error comes from Skatturinn, read the explanation. If it concerns the return's figures, go through the period's entries before you try again.

When to contact Exigo

Contact Exigo if the error remains after these checks, if the period is not two months, or if nobody in your company has access to the company settings. Include the exact error text or a screenshot, the VAT period and the time you tried to send.

The VAT return cannot be validated

The Validate button does not appear on the VAT return, or an error appears when you click it, and no closing entry is created. The return must be validated before it can be sent.

What could cause this

• Not all checks on the return have passed. Validate does not appear while a check is unresolved, and if a check fails, “Some checks fail in the current stage, please solve them before proceeding.” appears.
• An earlier VAT return has not been validated. Then “You cannot lock this return as there are previous returns that are waiting to be posted.” appears.
• The tax groups used by the closing entry are missing accounts. Then “Please specify the accounts necessary for the tax closing entry.” appears with a Configure accounts button.
• The setup for input VAT entered by hand is wrong. See the section on input VAT entered by hand at the top of this page.

What you can check

1. Open Accounting ‣ Accounting ‣ Closing ‣ Tax Returns and click the VAT return for the period. The checks then appear.
2. Click each check that has not passed and fix what it points to, for example bills that are still in draft.
3. If earlier returns are not validated, validate them first.
4. If the error mentions “tax closing entry”, do not change the tax groups; contact Exigo instead.

When to contact Exigo

Contact Exigo if the error concerns the accounts for the closing entry, if a check fails and you cannot see what it refers to, or if no closing entry is created even though no error appears. Include the VAT period, the error text and a screenshot of the checks.

A bill lands in a different VAT period than the one I chose

You post a vendor bill dated in a past period, but the accounting date moves forward and the VAT shows on the next period's return. Or a late bill does not show on the return for the period it belongs to.

What could cause this

• The VAT period has been locked. When a VAT return is validated, Odoo locks the period for entries with VAT.
• A vendor bill with VAT dated in a locked period gets an accounting date after the lock date, in the first open period. The VAT therefore goes into the next return, and a return already sent does not change. This is built-in Odoo behaviour.

What you can check

1. Open the bill and compare Bill Date with Accounting Date. The VAT return follows the accounting date.
2. A user with administrator access to accounting can see the lock date in Accounting ‣ Accounting ‣ Closing ‣ Lock Dates…, in the Lock Tax Return field.
3. If your accountant agrees that the VAT goes into the next return, you do not need to do anything.
4. If the VAT has to be in the earlier period, the return for that period has to be corrected. See the next section.

When to contact Exigo

Contact Exigo if the accounting date moves even though the period is not locked, or before you change a lock date. Include the bill number, both dates and the VAT period.

A VAT return that has been sent needs correcting

After the return was sent, you find an error in the period's figures, for example a bill with the wrong tax or input VAT that was missing.

What could cause this

• When the return was validated, Odoo posted a closing entry and locked the period. A correction you post in that period therefore goes into the next return automatically.
• To send a new return for the period, the return first has to be reopened, and only an accounting administrator can do that. Odoo refuses to reset the return while the period is locked.

What you can check

Your accountant decides whether the correction goes into the next return or whether a corrected return is sent for the period. In Odoo 19 a corrected return is sent like this:

1. Open Accounting ‣ Accounting ‣ Closing ‣ Lock Dates… and set Lock Tax Return to the last day of the previous period. The Exception line then appears: choose for me and a long enough time, for example for 1 hour, and click Save. Odoo then creates an exception to the lock for you but does not change the lock date itself.
2. Open Accounting ‣ Accounting ‣ Closing ‣ Tax Returns, click the three dots on the return's card and choose Reset. Odoo deletes the closing entry and sets the return back to New.
3. Fix the entries in the period.
4. Open the return, complete the checks and click Validate. Odoo posts a new closing entry, revokes the exception and locks the period again.
5. Click Submit, review the amounts and click Send. If Skatturinn already has a return for the period, Odoo sends the new return as a correction automatically.

When to contact Exigo

Contact Exigo if Odoo refuses to reset the return with the message “You cannot reset this return to new, as another return has been locked at a later date.”, if an error appears in any of the steps, or if you do not want to create a lock exception yourself. Include the VAT period, what needs correcting and the error text.

I don't know whether the VAT return was sent

You are not sure whether the period's return reached Skatturinn, for example after an error appeared or the dialog was closed.

What could cause this

• The dialog was closed with Discard before Send was clicked. Then nothing was sent.
• An error appeared after Send was clicked. Odoo sends the return to Skatturinn first and completes the return in Odoo afterwards. An error in Odoo therefore does not always mean the return did not arrive.
• Odoo's general guide to tax returns describes a Pay step and a Mark as Submitted button. The Icelandic VAT return has only the steps New, Review and Submit, and it is complete once the return has been sent.

What you can check

1. Open Accounting ‣ Accounting ‣ Closing ‣ Tax Returns and find the return for the period.
2. Once the return has been sent, the card shows “Submitted on:” and a date instead of the deadline (“Deadline:”).
3. Click the paperclip on the card to see the attachments. Skatturinn's receipt is a PDF named “VAT Report” followed by the period number and the year.
4. If the dialog was closed without clicking Send, nothing was sent and you can send the return.
5. If an error appeared after Send and you see neither a date nor a receipt, contact Exigo before you send again.

When to contact Exigo

Contact Exigo if you see neither a submission date nor a receipt after an error appeared. Include the VAT period, the time you clicked Send and the error text.

VAT is calculated wrongly on an order or invoice

A foreign vendor or customer gets Icelandic VAT, a product gets the wrong VAT rate, or a price shows with VAT where you expected a price without VAT.

What could cause this

• The contact has no fiscal position. A fiscal position replaces the Icelandic taxes with other taxes, for example a tax without VAT for foreign partners. The Icelandic accounting setup comes without fiscal positions, so they have to be set up.
• A webshop order was created before the customer signed in or filled in their billing details. Until then the cart gets taxes as if the buyer were in Iceland. The taxes update when the customer signs in or fills in the billing details.
• The product has the wrong tax. New products get Sala 24% and Innkaup 24% by default, so a product in the 11% rate needs Sala 11% and Innkaup 11%.
• The tax's name or its Label on Invoices has been changed. The text printed on invoices comes from the tax itself, so a change there shows on every new invoice.
• The Icelandic taxes are set up as excluded from the price. A product's price is therefore without VAT unless the setting has been changed.

What you can check

1. Open the contact, go to the Sales & Purchase tab and check the Fiscal Position field under Fiscal Information. Choose a fiscal position for foreign partners if one exists.
2. On an order or invoice in draft, choose the fiscal position on the Other Info tab before you add lines.
3. The fiscal positions that exist are in Accounting ‣ Configuration ‣ Accounting ‣ Fiscal Positions.
4. Open the product in Accounting ‣ Customers ‣ Products and check the Sales Taxes and Purchase Taxes fields.
5. Open Accounting ‣ Configuration ‣ Accounting ‣ Taxes and check that each tax's name and Label on Invoices match its percentage. Do not change a tax that is in use; choose the right tax on the product instead.
6. If some customers should see prices with VAT and others without VAT, read the B2B and B2C guide linked at the bottom of this page.

When to contact Exigo

Contact Exigo if there is no fiscal position for foreign partners, if a tax shows the wrong rate, or if you need a new tax or fee, for example a recycling fee calculated by weight. Include the name of the contact or product, the order or invoice number and a screenshot of the tax lines.