Full refund of crew income taxes
FAS crew pay a legislated 35 % flat rate tax. The shipping company receives a 100 % refund of taxes paid automatically at the beginning of each subsequent month.
No double taxatation
Pursuant to a contract between the Nordic coountries, amended in 2008, workers residing in Denmark, Sweden, Finland, Norway, Iceland and the Faroe Islands avoid double income- and property taxation. This contract has also been made with several other countries outside the Nordic region.
Low wage costs
In many cases, net wage costs after tax refund are lower in FAS than in other registries. This is due to the fact that social costs in FAS are low.
The Tonnage Tax System
Enacted in 2005, the Faroese Tonnage Tax System (TTS) is unique in Europe.
The system offers multiple advantages to the international ship owner. Available for vessels over 100 GT, ship owners may include their own ships, as well as charter tonnage, within the system. Operations closely linked to ship-handling may also be included.
The Faroese TTS was designed to be internationally competitive. Tonnage does not need to be registered in the Faroe Islands, nor does a vessel need to fly the Faroese flag. Most importantly, there is no tonnage ratio with regard to the number of Faroese flagged vessels.
One additional, all-important benefit: The TTS does not tax the profit on the sale of a vessel in the system to a company not in the system.
General
The Faroese Tonnage Tax System (TTS) is built on the same structure as other similar systems in the Nordic countries and the EU. However, many of the restrictions that are included in the other systems are not included in the Faroese TTS.
Generally, restrictions placed on shipowners / companies regarding shipping activity were not included, when the Faroese TTS passed the Faroese Parliament.
The Faroese Tonnage Tax System has not been amended since it entered into force in 2005.
