Faroe Islands Corporate Tax Calculator (Felagsskattur)
Calculate annual corporate income tax (felagsskattur) for Faroese Sp/f and P/F companies. Accurately determines flat 18% tax liability, state and municipal revenue splits, dividend distributions, and retained reserves in Danish Krone (DKK).
Corporate Tax: 180,000.00 DKK
On 1,000,000.00 DKK taxable net profit (flat 18% rate). Net profit after tax: 820,000.00 DKK.
⚙️ Financial Parameters
Wages, rent, materials, depreciation, and administrative overhead.
🧾 TAKS Corporate Tax Statement 18% Felagsskattur
⚖️ Statutory Framework: TAKS
• Rate: 18% flat rate applied on taxable net income.
• Split: 70% to national treasury (Landskassin) and 30% to the municipality (Kommunan).
• Dividends: 35% withholding tax on domestic individual dividend payouts.
Frequently Asked Questions (FAQ)
What is the corporate tax rate in the Faroe Islands? +
The statutory corporate income tax rate (felagsskattur) in the Faroe Islands is a flat 18% on taxable net business profits, one of the most competitive corporate tax rates in the Nordic region.
How are corporate taxes split between the government and municipalities? +
The 18% corporate tax collected by TAKS is distributed according to statutory ratios between the Faroese Home Rule Government (Landskassin, receiving 70%) and the local municipality where the company is registered (Kommunan, receiving 30%).
What is the tax rate on dividends distributed to shareholders? +
Dividends distributed by Faroese companies are subject to dividend withholding tax: 35% for resident individual shareholders (which settles their final capital tax), or a reduced rate (typically 0% to 15%) for qualifying parent corporate bodies under double taxation treaties.
What is the deadline for filing corporate tax returns with TAKS? +
Companies registered in the Faroe Islands must submit their annual tax return (sjalvuppgava fyri felog) and audited financial statements to TAKS no later than July 1st following the close of the financial year.
Can operating losses be carried forward in the Faroe Islands? +
Yes. Corporate tax losses incurred in a financial year can generally be carried forward indefinitely to offset taxable profits in subsequent fiscal years.
📊 TAKS & Faroese Labor Market Funds (Samhaldsfasti) Matrix
| Statutory Component / Legal Deduction Item | Calculated Amount (DKK) |
|---|---|
| Primary Net / Statutory Payable Amount | 0 kr. |
Engr. Muhammad Shahzad
Principal Financial Systems Architect & Nordic North Atlantic & Faroese Tax Architecture Lead
Lead software and systems architect specializing in high-performance browser computing, algorithmic validation, financial models, and zero-telemetry client-side privacy architecture.