Faroese parliament clears final legal hurdle for deposit scheme

The Faroese parliament has approved a law change exempting the new deposit-return scheme from value-added tax, clearing what KVF reports was its last legal obstacle. The amendment passed unanimously, with 30 votes in favour and none against.

The VAT exemption was needed because, under the existing law, tax would have been charged on the deposit. A customer paying 2.50 kroner could then have received only 2 kroner back when returning a container.

The scheme has been in development since 2012, when a proposal was made for shops to accept all deposit containers regardless of where they were bought. Disagreement followed over how the system should work and who should be responsible. In 2016, the state alcohol company proposed a shared system involving businesses and waste-management companies.

The parliament approved the law establishing the new scheme in May 2024 and gave responsibility for it to IRF. A hall to receive deposit containers from across the country was then built in Sandavágur. The scheme was initially due to start in October last year, but its launch was postponed until September this year.