Faroese seafood company forced into bankruptcy over unpaid taxes

The Faroese seafood processing company Sjógæti has been declared bankrupt after failing to pay taxes owed from the sale of a cultural quota, public broadcaster Kringvarp Føroya reports.

According to a letter sent to creditors, the company must pay 50% of the sale price—amounting to tens of millions of krona—in taxes, funds it no longer possesses. The Faroese Tax Authority (Føroya Rætt) upheld the decision, rejecting Sjógæti’s claim that it should not be taxed on the full sale amount.

The company had received a cultural quota in 2018, allowing it to process 900 tonnes of mackerel and 540 tonnes of herring over four years for the Faroese market. Despite purchasing a building in Eiði and acquiring smoking equipment, sales of the smoked mackerel underperformed, leading to financial strain.

Jóhannus Martin Olsen, chair of the bankruptcy estate, confirmed the proceedings to Kringvarp Føroya. The company had previously arranged for another vessel to catch the mackerel, as it lacked its own fishing boat.