Faroe Islands Foreign Specialists & Researchers Tax Calculator
Compare net take-home salary and compute tax savings under the Faroese Foreign Specialist Flat Tax Regime (15% to 20% flat tax) against the standard progressive TAKS system.
Salary & Qualification Tier
Annual gross: 900,000 kr.
Substantial monthly savings achieved by opting for the flat tax scheme instead of standard progressive taxation.
Scheme vs. Standard Comparative Matrix Monthly figures in DKK
| Payroll Element | Special Flat Scheme | Standard Progressive | Advantage |
|---|---|---|---|
| Gross Monthly Salary | 75,000 kr. | 75,000 kr. | — |
| Social Funds (ALS, AMEG, Health) | 3,782 kr. | 3,782 kr. | Equal |
| Income Tax Withholding | 15,000 kr. (20%) | 29,640 kr. (39.5%) | +14,640 kr. |
| Effective Tax & Fund Rate | 25.04% | 44.56% | −19.52% |
| Monthly Net Take-Home | 56,218 kr. | 41,578 kr. | +14,640 kr./mo |
Faroe Islands Foreign Specialist Tax Scheme Explained
Purpose of the Scheme
To attract high-caliber global expertise to Faroese industries—including aquaculture biology, software architecture, medical specialties at Landssjukrahusið, and marine navigation—the Faroese Parliament (Logting) introduced Logtingslog um serliga skattaskipan fyri utlendskar serfroðingar og granskarar.
15% vs. 20% Flat Rates
Under the law, university researchers approved by an authorized Faroese research body qualify for a flat 15% tax rate. Key commercial specialists in private enterprises receive a combined flat rate of 20% (15% national tax + 5% fixed municipal share), drastically lower than ordinary progressive tax rates that exceed 45%.
Absence of Deductions
Under the flat tax scheme, the tax is applied directly to gross remuneration without the 55,000 DKK personal allowance (botnfradrattur) and without deductibility for mortgage interest or work-related transport expenses.
36-Month Time Limit
An individual may benefit from this special taxation for up to 36 months (3 years) in total. Once the 36-month ceiling is reached, any continued employment in the Faroe Islands falls automatically under normal progressive taxation rules.
Frequently Asked Questions (FAQ)
What is the Faroese Foreign Specialist and Researcher Tax Scheme? ↓
The Faroese Foreign Specialist Scheme (Logtingslog um serliga skattaskipan fyri utlendskar serfroðingar og granskarar) allows recruited international researchers and qualified experts to be taxed at a flat rate of 15% or 20% for up to 36 months, bypassing high progressive personal tax rates.
Who qualifies for the foreign specialist tax regime? ↓
Eligible candidates include accredited researchers affiliated with Faroese research institutions (e.g. Froðskaparsetur Foroya) and highly qualified key specialists (physicians, engineers, software architects, marine biologists) meeting statutory salary criteria who have not been tax residents in the Faroes in the preceding 5 years.
Are personal allowances granted under the flat tax scheme? ↓
No. Under the flat rate scheme, no standard personal tax allowance (botnfradrattur) or itemized deductions (interest, commute, pension) are permitted against the flat tax calculation base.
Do social fund contributions still apply to foreign specialists? ↓
Yes. Statutory employee labor fund withholdings—specifically ALS Unemployment (1.25%), AMEG Pension (3.00%), and Heilsutrygd Healthcare—apply to gross wages alongside the flat tax.
What happens after the 36-month period expires? ↓
After the 36-month statutory duration concludes, the expatriate automatically transitions to the standard Faroese taxation regime, subject to standard progressive national and municipal tax rates.
📊 TAKS & Faroese Labor Market Funds (Samhaldsfasti) Matrix
| Statutory Component / Legal Deduction Item | Calculated Amount (DKK) |
|---|---|
| Primary Net / Statutory Payable Amount | 0 kr. |