If you’re planning a road trip in Iceland, you may hear about the new Iceland Kilometer Road Tax, which comes into effect on January 1st, 2026.
This article explains what the tax is, why it exists, and how it affects your camper van rental with Black Sheep Campers.
What Is the Iceland Kilometer Road Tax?
The Iceland Kilometer Road Tax (also known as a road usage fee) is a government-mandated charge based on how many kilometers a vehicle is driven.
Instead of collecting road funding mainly through fuel taxes, Iceland is moving toward a pay-per-kilometer system. This ensures that all vehicles contribute fairly to road maintenance, regardless of fuel type.
The tax applies to:
- Petrol vehicles
- Diesel vehicles
- Hybrid vehicles
- Electric vehicles
It also applies to rental cars and camper vans.
Why Is Iceland Introducing This Tax?
Iceland’s road network requires constant maintenance due to:
- Harsh and rapidly changing weather conditions
- Increased tourism and road usage
- The growing number of electric vehicles that previously paid little or no fuel tax
The kilometer road tax ensures that everyone using Icelandic roads contributes to their upkeep, helping maintain safe and reliable roads across the country.
How Much Is the Kilometer Road Tax?
For standard passenger vehicles and camper vans under 3.5 tonnes, the official rate is:
6.95 ISK per kilometer driven
Your total cost depends entirely on how far you drive during your rental.
Examples:
- 1,500 km → approx. 10,425 ISK
- 2,000 km → approx. 13,900 ISK
How Does This Affect Your Camper Rental?
This is not a fee created by Black Sheep Campers.
It is a mandatory government road tax that all rental companies in Iceland are required to collect and report.
With Black Sheep Campers:
- The tax is calculated based on your actual mileage
- The amount is clearly itemized
- You only pay for the kilometers you drive
- No hidden fees or estimates
Is Fuel Tax Still Included?
Yes. Fuel taxes still apply, but they are expected to gradually decrease over time as the kilometer-based road tax becomes the primary method of funding road infrastructure.
In practice, this means road costs are slowly shifting from fuel consumption to actual road usage.
Why This Is Fair for Travelers
The kilometer road tax is considered fair because:
- You pay based on how much you drive
- Short trips cost less than long road trips
- All vehicles contribute equally
- Road maintenance is improved nationwide
If you drive less, you pay less.
What You Should Keep in Mind When Planning Your Trip
✔ Plan your route in advance
✔ Longer trips result in higher kilometer tax
✔ The tax applies nationwide and equally
✔ No action is required from you — we handle everything
Transparency at Black Sheep Campers
At Black Sheep Campers, we believe in clear pricing and no surprises.
The Iceland Kilometer Road Tax is a national regulation, and we make sure it is:
- Explained clearly
- Calculated accurately
- Communicated transparently at the end of your rental
If you have any questions about this tax or your camper van rental, our team is always happy to help.
Ready to explore Iceland?
Book your camper van with confidence at www.blacksheepcampers.is
