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.