The Government is proposing to introduce a resource rent tax for onshore wind power plants with effect from 2023. Expectations of a continuously decreasing cost level and persistently high energy prices have been decisive for the Government's proposal. The effective resource rent tax rate is proposed set at 40 percent, which means that the formal resource rent tax rate will be set at 51.3 percent.
The Government proposes that the duty to pay resource rent tax shall apply to onshore wind power plants that are subject to licensing obligations under the Norwegian Energy Act, i.e. power plants that have more than five turbines or a total installed capacity of 1 megawatt (MW) or more.
The resource rent tax is designed as a cash flow tax, i.e. revenues and investments are taxed on an ongoing basis in the year in which they are earned/incurred.
Revenues from energy production shall generally be determined on the basis of spot market prices. However, the proposal includes an exception for energy production sold through existing fixed-price energy agreements entered into prior to 28 September 2022. In these cases, energy production is valued at the contract price. Exceptions for energy related to specific fixed-price contracts will also be considered. Revenues from the sale of guarantees of origin and electricity certificates will be included in the resource rent tax basis.
Operating assets acquired before the introduction of the resource rent tax may be deducted through ordinary depreciation on remaining tax values. Any negative calculated resource rent income may be carried forward with interest and be deducted from any positive calculated resource rent income in subsequent years.
Corporate tax is calculated before the resource rent tax, and resource rent-related corporation tax shall be deducted from the resource rent tax basis, equivalent as in the petroleum and hydropower sector. An effective resource rent tax rate of 40 percent means that the formal resource rent tax rate is set at 51.3 percent.
The Government further proposes to increase the production tax for onshore wind power from 1 to 2 øre/kWh and to make this tax deductible in the set resource rent tax.
Furthermore, it is proposed to introduce a new natural resource tax of 1.3 øre/kWh, where 1.1 øre will go to the municipalities and 0.2 øre to the county councils. The natural resource tax will be made deductible in the set resource rent tax.
The proposal will be circulated for consultation by the end of the year.