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HMRC internal manual

Double Taxation Relief Manual

Faroes: Source state taxation


There are three rates of source state taxation provided by Article 10.

Dividends will be exempt from source state taxation if the beneficial owner is a pension scheme.

The rate will be 5% in respect of dividends paid by a subsidiary in one state to a parent in the other (a 10% holding in the subsidiary is required).

In all other cases (which will include most payments from property investment vehicles) the rate will be 15%.

Interest and Royalties

In accordance with Articles 11 and 12, interest and royalties are taxable only in the state of residence of the beneficial owner.