Faroe Islands Tax Guide | Global Tax Guide

One-sentence summary Faroe Islands's corporate tax position: 18% flat rate. Personal income tax: Progressive - national tax (from DKK 65,000/year) plus flat municipal tax (16-23% depending on municipality) plus church tax where applicable; non-residents/limited tax liability taxed at a flat 42%. VAT/consumption tax: 25% standard rate (matches Denmark's rate, though the Faroes set their own tax law independently under 1948 Home Rule).

Self-governing territory of the Kingdom of Denmark since 1948 (Home Rule), with its own tax legislation separate from Denmark; not an EU member and not part of the EU VAT area.

Corporate Tax Rate

18% flat rate.

Personal Tax Rate

Progressive - national tax (from DKK 65,000/year) plus flat municipal tax (16-23% depending on municipality) plus church tax where applicable; non-residents/limited tax liability taxed at a flat 42%.

VAT / GST Rate

25% standard rate (matches Denmark's rate, though the Faroes set their own tax law independently under 1948 Home Rule).

Residency, CFC, Thin Cap & Treaty Network

Full narrative detail on residency tests, CFC rules, thin capitalization / interest limitation rules, and the treaty network is on the build list for this page and will be added in a future update.

Sources: Faroese Tax Authority (TAKS) - official taxation guide, Wikipedia - Taxation in the Faroe Islands. Page last verified: August 08, 2026. General information only - confirm current rates with a licensed advisor in this jurisdiction before relying on this page.