Runavík municipality likely to receive VAT refund for swimming pool

Runavík municipality has likely already received, or will receive, a refund of the VAT paid for the Bylgjan swimming pool, according to Aksel V. Johannesen, a government minister, in response to a query from MP Steffan Abrahamsson Løkin.

Johannesen stated that the swimming pool does not qualify for VAT reimbursement under Section 3 of the VAT Act, as this section applies only to associations, institutions, and foundations engaged in non-commercial, public-benefit leisure activities—not municipalities. However, municipalities, including Runavík, operate under a system where 75% of input VAT can be refunded.

Johannesen added that there are no current plans to change the VAT refund system for municipalities. The government and the Municipal Association have established a working group to propose a funding model for elderly care, ensuring municipalities can manage growing responsibilities in this area. Financial agreements between the state and municipalities, such as VAT refunds, are part of this context.

The query was reported by Faroese public broadcaster KVF.