The Icelandic language test is held in Reykjavík, Akureyri, Egilsstaðir and Ísafjöður twice a year in November and May. You can register on www.mimir.is
The test costs 40.000 ISK.
To pass the test you need to be able to deal with daily life, for example, at work, in school and in private in Icelandic. You need to have basic knowledge of grammar and vocabulary, and understand easy conversations. You also should be able to write simple short texts and understand radio and television programs if they are about topics you are familiar with. The exam has a listening, reading, writing and verbal components.