Vang addresses tax reform impact on workers abroad in Faroe Islands

It’s too early to make concrete assessments regarding the impact of the tax reform on both domestic and international activities.

This statement comes from Ruth Vang, the Minister of Finance, in response to a question from Løgtingsmaður Grím Sundstein, who inquired about the reform’s effects on those working abroad.

The minister pointed out that the tax reform, approved last year, aimed to reduce income taxes and eliminate tax advantages for those working at sea or overseas compared to those employed on land in the Faroe Islands.

Income taxes were reduced this year, with another decrease scheduled for 2025. Changes affecting Faroese citizens working at sea or abroad will take place through to 2026.

The Ministry of Finance conducted analyses during the reform’s discussions, outlining how different groups would be affected. The tax year for 2024 is not yet complete, and the effects of tax changes will emerge gradually as individuals reorganize their lives and make decisions regarding employment, work hours, education, and more.

In the future, efforts should focus on responsibly further lowering income tax so it does not deter people and businesses from working, both in the Faroe Islands and abroad, according to Ruth Vang.