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Yes, there is a duty free shop for arriving passengers at Keflavík, it's towards the final stages of airside, on the lower level, some way after passport control (most of the airport is in Schengen), but before emerging into landside. You can't miss it.
"Duty free" arrangements for arriving passengers is not unusual in Europe now, LHR has it for example. KEF genuinely is tax free however. Most of the facilities for arriving passengers in Europe involve some sort of heavy discounting or special products.