Can I drive with the Australian driving license in Iceland?

We have not yet collected the Australian laws. Please visit us again in a later time.

The laws in Iceland say the following:
VII. CHAPTER Foreign driver's license. Article 29 The validity of a foreign driver's license in this country. A driver's license issued in a country that is a member of the European Economic Area or in the Faroe Islands entitles the holder to drive the same vehicles in this country for categories AM, A1, A2, A and B that it allows to drive in the issuing country during its validity period, but no longer than until the holder's age of 70. However, the age limit may not be lower than stipulated in Article 6. in respect of mopeds and light mopeds. A foreign driver's license does not grant the right to transport passengers and goods for commercial purposes. However, it does not apply to the holder of a valid driver's license that has been issued in a country that is a member of the European Economic Area or in a country that, according to an agreement with the EU, has implemented the provisions of Directive no. 2006/126/EC and no. 2003/59/EC. However, does the foreign driver's license give the right to drive a vehicle in: Class C1 and C, including for commercial goods transport, Class D1 and D, including for commercial passenger transport, with a different validity period than stipulated in Article 22. for those categories, the certificate must be renewed no later than two years after the date on which the holder took up permanent residence here. A driver's license, issued in a country outside the European Economic Area, does not grant authorization to drive a motor vehicle unless the license holder meets the age requirements of Article 6. in respect of the vehicle being driven. Instead of a driver's license, a temporary driving permit or a tourist driver's license issued in Denmark, Finland, Norway or Sweden is valid. A driver's license issued outside the European Economic Area must be in Latin letters or the license must be accompanied by a translation of its text in Icelandic, Danish, Norwegian, Swedish or English. A driver's license in this article also includes, as appropriate, a foreign international driver's license. A foreign citizen, who has a foreign driver's license and enjoys foreign rights, may drive a vehicle in this country to the extent that the driver's license entitles.
Source: Iceland Ministry of the Interior - Driving license regulation

It means that:
1. Holders of an Australian driving license can drive in Iceland under certain conditions. According to the Icelandic Ministry of the Interior's regulations, a driver's license issued outside the European Economic Area (EEA) is valid for driving in Iceland if the license holder meets the age requirements for the vehicle being driven. Since Australia is not a member of the EEA, Australian driving license holders must comply with the age requirements specified in Article 6 of the Icelandic regulations. Additionally, the Australian driving license must be in Latin letters, which it is, as it is written in English and includes all necessary information such as the driver's photo, name, birth date, address, expiry date, and the classes of allowed vehicles to drive. Therefore, an Australian driving license holder should be able to drive in Iceland, provided they meet the age requirements and the license is valid.
2. An International Driving Permit (IDP) is not explicitly required for holders of an Australian driving license to drive in Iceland, as the Icelandic regulations state that a driver's license issued outside the EEA must be in Latin letters or accompanied by a translation in Icelandic, Danish, Norwegian, Swedish, or English. Since the Australian driving license is already in English and complies with the conventions mentioned, it meets the requirements set forth by the Icelandic authorities. The Australian driving license is considered sufficient as long as it is valid and the driver meets the necessary age requirements for the vehicle they intend to drive. An IDP, which is a translation document, would not be necessary in this case because the Australian license is already in a language that is acceptable according to the Icelandic regulations.

Different rental agencies might still require an IDP even while the local laws do not require it. Please find your appropriate local supplier in the list above to verify.

We don't have any real life reports by Australian travelers in Iceland.
If you've been there and was pulled over by the local officials, please share your experience with us and we will publish it to help others.