Reykjavík Grapevine - 09.09.2011, Blaðsíða 10

Do y'all FRIGGIN' HATE ICELANDIC CUSTOMS? Or does this source of state
revenue make sense to you as a source of state revenue? TELL US!
10
The Reykjavík Grapevine
Issue 14 — 2011
Nordic House Sturlugata 5 101 Reykjavík Tel. 5517030 www.norraenahusid.is
The Nordic house offers a tour with world famous architect Alvar Aalto (portrayed
by an actor), where guests are taken through the history of the Nordic House,
inroduced to the designs and history of the master himself, along with sampling
culinery delights from Dill restaurant, the top kitchen in Iceland. Come and
experience an architectural gem right in the heart of the city...

TAKE THE TOUR WITH ALVAR AALTO
Please feel free to drop
by monday to saturday
at 11 am and 13 pm.
Price 10 €
Bring up the Directorate of Cus-
toms in Iceland and you’re liable to
unleash a host of emotions ranging
from frustration to anger. This gov-
ernment entity, which is responsible
for, among other things, making sure
that items entering the country are
appropriately taxed, is perhaps the
bureaucratic equivalent to the DMV
in the States.
“Even thinking about the ‘kilt for my wed-
ding incident’ I had with Tollstjóri [Di-
rectorate of Customs] still sends me in
near apocalyptic clouds of rage and.....
AAARGH!” Bob Cluness wrote on The
Grapevine’s Facebook page. He pur-
chased a kilt from Scotland for 100.000
ISK, and when it arrived, he was sur-
prised to learn that he owed Customs
50.000 ISK in duties (15% tax, 25,5% VAT,
550 ISK Post Office processing free). “His
kilt wound up costing five times more
than my dress,” his wife Sigríður Harpa
Halldórsdóttir tells me.
As Chief Superintendent of Customs
Hörður Davíð Harðarson points out, the
duty can be overbearing when it comes
to smaller purchases. For instance, when
someone buys a DVD for 1.000 ISK, it
winds up costing 70 to 80% more by the
time it’s in the recipient’s hands. If the
purchaser hasn’t already accounted for
this mark-up, the letter from Customs
informing them that they have actually
purchased one DVD for the price of two
is an unwelcome surprise.
Unfortunately, however painful it is,
this is part of the reality of living on a
small island that manufactures little apart
from fish, lamb, and computer games.
However, Customs does not have the
right to tax everything that comes into the
country, and it has come to The Grape-
vine’s attention that the entity is perhaps
overstepping its boundaries.
TAxING BIRTHDAY GIFTS? WTF!
A gift, for instance, is exempt from taxes
if its value is less than 10.000 ISK, it is for
a special occasion, such as Christmas, a
birthday, confirmation, or wedding, and
the sender has an address abroad. Wed-
ding gifts can exceed 10.000 ISK, though.
Nonetheless, that didn’t stop Cus-
toms from holding a package addressed
to Ásta Sól Kristjánsdóttir, which con-
tained a birthday gift for her infant son.
“I got a letter from Customs saying they
needed permission to open it. When I
called them, they said the package had
not been marked ‘gift,’ and that it was
obviously not my birthday any time soon,
strongly implying that I was trying to
cheat the system because the package
was addressed to me and not my son,”
Ásta tells me. “Finally the package ar-
rived, but it was the week after my son’s
birthday.”
What was most irksome about the
situation was the fact that the people at
Customs told her that the package had
not been marked ‘gift,’ but when she re-
trieved it, she saw that it had in fact been
marked ‘gift’.
Others have reported similar experi-
ences. They are legion.
Echoing this frustration, Antón Ame-
neiro suggested jokingly (we think, jok-
ingly) on the Grapevine’s Facebook page:
“Since reasoning and confronting the is-
sue rationally doesn't help, I'm going to
start asking my beloved friends and fam-
ily to include insulting notes in their pack-
ages, something like, "merry Christmas
you greedy pirates at Tóllhúsið, hope you
choke on your hangikjöt, gleðileg jól!" :)”
CRACKING DOWN ON PHONY GIFTS
Hörður explains that, unfortunately, be-
cause people have been trying to cheat
the system by falsely marking their pack-
ages as gifts, Customs has had to step
up their watch, thereby inconveniencing
honest people.
“We noticed, if you look at, for in-
stance, Barnaland.is, that there were lots
of people—Icelanders living in Germany,
Norway, Sweden—advertising that if
someone put 10.000 ISK in their bank ac-
count that they would purchase clothes
at H&M or something, and send the
stuff to Iceland marked as gift,” Hörður
tells me. “We were stopping many, many
packages per day; there were all kinds of
things in packages marked gift,” he says.
Hörður says Customs opens less than
1% of packages that come through the
Post Office. He couldn’t reveal exactly
how they were targeting phony gifts, but
he did say that they have been following
things closely, and have had to inconve-
nience honest people by asking them to
go to the Post Office to verify their gifts.

“For birthday gifts, we look at people’s
kennitala [ID number, including birthday];
we’re paying attention to these things.
We’re seeing people sending Christmas
gifts as early as July. People are trying to
trick us. We stopped a wedding gift the
other day. We asked the couple to bring
proof that they were getting married and
then it turned out that they had been
married for four years,” Hörður tells me.
“Icelanders like to cheat—we don’t want
to pay.”
At the same time, he says it’s unfor-
tunate that regular, honest people have
to be bothered by the increased surveil-
lance. “But when people come and ex-
plain that this is a gift for their son’s first
birthday, we of course let the package go
as a gift.”
TAxING USED STUFF? WTF!
In addition to gifts, “used articles con-
stituting an inheritance from abroad,
excluding however vehicles or other mo-
torised means of transport” and items
sent for repair under warranty are also
supposed to be exempt from tax.
Yet, as Malcolm Kenneth Fraser
points out, this can be difficult to prove.
“Say you forget your camera at your par-
ents' house in the US, and they send it
back to you, it is often impossible to jus-
tify that it is yours when Customs asks
you to pay taxes on it.”
For instance, Jan Seven sent his Kin-
dle to Germany for repair under warranty,
where it was purchased for the equiva-
lent of 22.000 ISK. When it came back to
Iceland, Jan received a letter informing
him that he owed 20.000 ISK in taxes. “I
asked them if they could tell me how the
tax was calculated, and I’ve been direct-
ed from one person to the other for two
months now,” Jan says in frustration. “It’s
a circle that never ends.”
Refusing to pay nearly 100% in taxes,
Jan had the Kindle returned to sender
and is still waiting for an answer about
how the tax was calculated.
CRACKING DOWN ON PREVIOUSLY
SMUGGLED ITEMS
Though Hörður didn’t know for sure what
had happened in Jan Seven’s case, he
assumes that the Kindle was originally
smuggled in without paying tax, and then
when it went for repair, Jan couldn’t prove
that he had already paid tax on it.
This is another scenario that Customs
has been cracking down on. “A year and
half ago, Customs stopped allowing peo-
ple to register their expensive computers
and cameras before leaving the country,”
Hörður tells me. “What was happening
was that people were going to America,
buying an Apple computer for 300.000,
getting back into the country without
paying taxes, and then registering it in
Iceland before their next trip to declare it
legal. So, we’ve stopped letting people do
this, and instead we ask people to show
their receipt when they come back into
the country.”
Since Customs posted an infomercial
on their website about how goods pur-
chased abroad are taxed, he says that
there has been an increase in the number
of people who buy expensive cameras
or computers declaring and paying the
tax when they arrive in Keflavík instead
of smuggling the items into the country.
“It’s much better to do it that way, so that
the next time you go abroad, there’s no
stress of being fined when re-entering
the country or sending it off for repaid.”
True Crime | Really, it's a crime
…Honest people get mixed up in the fray
Customs Is Cracking Down
“Icelanders like to cheat—we don’t want to pay.”
Words
Anna Andersen
Illustration
Megan Herbert
Continues on page 27