Deposit return system delayed pending VAT law change

The new deposit return system has been delayed after the Ministry of Finance determined that the VAT Act must first be amended, Kringvarp Føroya reported on Tuesday.

The system was due to launch today. It is intended to allow people to return deposit containers at a single location.

The Faroese Parliament has passed legislation enabling the system, which is to be introduced through a regulation. However, that regulation has not yet been published.

Finance Minister Eyðdis Hartmann Niclasen said the VAT Act must be amended to remove any doubt that the new deposit return system is exempt from VAT obligations.

Niclasen does not expect the change to take long, but said a formal process is required to amend legislation. The matter is now being handled by the Ministry of Finance.