Shipping companies that have vessels registered in the Faroe Islands International Ship Register FAS are subject to the same tax liabilities as other companies in the Faroe Islands.
Howewer, they can choose either to enter the company tax scheme or to enter the Tonnage Tax Scheme (TTS), where the enrolment is binding for 3 years.
All crew members on FAS registered vessels pay a 35% flat rate tax and the shipping company will receive a 100% refund of taxes paid from the Faroese Tax Authorities (TAKS). This swift process of refund takes place in the beginning of each month – usually the 3rd banking day.
Non-Faroese crew members pay no social security taxes in the Faroe Islands.