Capital gains tax law set to change

The law on taxing capital gains of residents in countries that do not have a double taxation deal with the Faroes is about to change.

During processing of the bill on taxation of capital gains with regards to sales of fishing rights, it became clear that the finance ministry could not tax capital gains from individuals who own shares or bonds in the Faroes but are not fully subject to Faroese taxation.

A new bill submitted to Parliament seeks to change this, enabling the finance ministry to tax capital gains of residents in countries that do not have a double taxation deal with the Faroes.

The Faroes have double taxation agreements with the Nordic countries, the UK, India and Switzerland. Residents of these countries will not be required to pay capital gains taxes in the Faroe Islands.

Translated by prosa.fo