Taxation

Working in Europe | Taxation/salaries | Faroe Islands

The Faroese tax system is based around a set of direct and indirect taxes.

The tax system includes personal income taxes, value added taxes, customs and excise duties on various goods and services.

Taxes are also claimed on pension and capital gain. 

 

All capital gains income earned by Faroese residents, irrespective of source, is subject to Faroese taxation.

Interest on deposits in Faroese and foreign banks is taxed as capital gains income. Tax on interest on deposits in a Faroese bank is withheld at source by the bank.

Individuals with other capital income than interest from deposits in Faroese banks have to file a capital income tax return.

The tax rate on capital gains income is 35 percent.

Capital gains income from foreign sources may be subject to tax treaty relief.

 

 

Read more:

Customs and Tax Office