Faroe Islands
Northern Europe · FO · 9 treaties
What are the main tax rates in the Faroe Islands?
The Faroe Islands have an 18% corporate tax rate, a 25% VAT standard rate, and a 35% capital gains tax. Personal income is taxed at 0%.
Tax profile
| Corporate income tax | 18% |
| Withholding — dividends | 18% |
| Withholding — interest | 0% |
| Withholding — royalties | 18% |
| VAT / GST (standard) | 25% |
| Personal income (top rate) | 0% |
| Capital gains | 35% |
| Tax system | Worldwide |
| Residency threshold | 180 days |
| Exit / departure tax | No |
| CFC rules | No |
| Transfer pricing | Oecd Aligned |
| Digital nomad visa | No |
| Digital services tax | none |
| Global minimum tax (Pillar 2) | None |
Common questions
- What is the corporate tax rate in the Faroe Islands?
- The corporate tax rate in the Faroe Islands is 18%.
- What is the capital gains tax rate?
- Capital gains are taxed at a rate of 35% in the Faroe Islands.
- How long does it take to become a tax resident?
- You can become a tax resident in the Faroe Islands after 180 days.
Tax residency
Easy to leaveWhat makes you a tax resident — and how hard it is to stop being one.
- resident in the Faroe Islands (accommodation is acquired and residence is taken up)
- stay at least 180 days in any 12‑month period
Tax residency generally ends once the individual leaves the Faroe Islands with their family and no longer has accommodation available for permanent use, so physically moving away and giving up a Faroese home is usually sufficient.
Source: TAKS (Faroe Islands Tax and Customs Administration)
Tax treaty network (12)
In-force double-tax treaty partners. Treaty-reduced withholding (dividends / interest / royalties) shown where the official source publishes a rate; otherwise the country's statutory rate applies unless the treaty text provides a reduction.
| Partner | Div | Int | Roy |
|---|---|---|---|
| Aland | — | — | — |
| Denmark | — | — | — |
| Finland | — | — | — |
| Iceland | — | — | — |
| Norway | — | — | — |
| Sweden | — | — | — |
| Greenland | — | — | — |
| United Kingdom | — | — | — |
| Switzerland | — | — | — |
| India | — | — | — |
| Bermuda | — | — | — |
| Cayman Islands | — | — | — |