Iceland lies entirely south of the Arctic Circle (66°33′48″ N). The Arctic Circle does not cross mainland Iceland.
Grímsey Island (40 km / 25 mi north of mainland) straddles the Circle at 66°33′ N. Its northern tip is 1.1 miles (1.8 km) north of the Circle; the rest of the island is south.
Mainland Iceland never experiences true midnight sun (24-hr sun) or polar night. Summer nights are bright (nautical twilight), winter days short (4–5 hrs sun), but sun always rises/sets.
For Arctic Circle crossing certificate: visit Grímsey.