A new cruise passenger tax that came into effect in Iceland this month was introduced too quickly and is too expensive, cruise representatives say.
The daily per-passenger Infrastructure Fee of 2,500 Icelandic Krona (ISK) – approximately £14.50 – was introduced on 1 January 2025, after it was approved last year.
MSC Cruises has reportedly warned the fee could affect its future plans for Iceland; CLIA UK said the charge is ‘disproportionate’ and a ‘cause for concern’; while Ambassador Cruise Line said it is ‘evaluating’ the effect of the fee.
The fee is applied to each passenger on board an international cruise ship for each 24 hours it is in port or in Icelandic territory.
Cruise Iceland warned before the tax came in that the fee could deter cruise ships, with those that circumnavigate the country hit harder, because the tax is charged per day.
The Icelandic Government wants to generate about £8 million, and Cruise Iceland told local news source RUV that Grundarfjörður, Vestmannaeyjar, Akureyri, and Faxaflói ports have reported cancellations, with the fee cited as a reason.
Cruise Iceland Chairman Sigurður Jökull Ólafsson told RUV the fee was not introduced with enough notice and the financial hit would be significant.
“For example, one ship that visits Reykjavik, Ísafjörður, and Akureyri around eight to nine times each summer will have to pay 440 million ISK out of its own operations in 2025,” he said.
The Icelandic Ministry of Finance and Economic Affairs told The Independent: “This obligation to pay the infrastructure tax applies regardless of when the trip was sold.”
RUV reports MSC Cruises Port Operations Director Francesco de Curtis said: “This new proposed Infrastructure Fee is at a level where it could affect our assessment of the viability of Iceland in our future itineraries and plans.”
In a statement, CLIA UK told Travel Gossip: “The cruise industry is a vital contributor to local economies, creating thousands of jobs and supporting small businesses. Through taxes, duties and partnerships with local authorities, we strive to give back to communities, ensuring that tourism thrives for everyone – residents and visitors alike.
“In Iceland, however, the recently introduced infrastructure fee is a cause for concern. This fee is disproportionate compared to similar charges in the travel and tourism sector, while the revenue is not directed towards communities in the rural areas.
“We are calling on the new Government to address these concerns and ensure that decisions regarding port fees enhance the experience for travellers while directly benefiting local communities and supporting sustainable growth.
“By working hand in hand with local authorities, we are committed to fostering a balanced approach that supports both the tourism industry and the communities it serves.”
Travel Gossip has contacted the main cruise lines that sail to Iceland, but only Ambassador has commented so far.
Ambassador said: “As these changes are relatively new, we are evaluating the situation and guests on Icelandic itineraries will be advised of any changes as a priority following this ongoing review.”
