Resource rent tax on aquaculture – final framing

The Norwegian government, with the support of the parties Venstre and Pasientfokus, have achieved a majority in the Norwegian Parliament for a resource rent tax on aquaculture with a tax rate of 25%. The final design of the tax differs in some respects from the original proposal put forward in the autumn of 2022, where an effective resource rent tax rate of 40% was proposed, see our previous article of 5 October 2022. The final design of the tax is based on the model presented by the Norwegian government in March, where an effective tax rate of 35% was proposed, see our previous article of 4 April 2023. The parties have agreed on the following:

• The effective tax rate is reduced from 35 to 25%.
• The valuation discount on wealth taxation on aquaculture licenses is increased from 50 to 75%.
• The host municipalities and counties are guaranteed a higher income from the aquaculture fund Havbruksfondet for 2023.
• Several petition proposals are put forward to strengthen the environmental profile and contribute to technology development, where the Norwegian Parliament requests the following from the government:
  • ensure that environmental indicators for the traffic light system are in place from the auction round in 2024, where indicators must be examined and assessed, such as the impact on sea trout, emissions and mortality;
  • examine a proposal to introduce resource rent tax on offshore aquaculture before announcing the national budget for 2024, where the examination must provide clarification as to whether there is basis for resource rent tax on offshore aquaculture;
  • introduce an arrangement that allows for production in closed technology where reduced production is required as a result of the traffic light system;
  • submit a proposal for an environmental technology scheme during 2023;
  • present a proposal for better organisation of the cooperation between the authorities and the aquaculture industry during the spring of 2024, in order to ensure more comprehensive management, better sustainability and better fish welfare;
  • present initiatives for increased processing of seafood in Norway during the spring of 2024; and
  • ensure that the aquaculture fund Havbruksfondet receives funds as if the production tax were increased from 56 to 90 øre from 1 January 2023.

On the basis of the current salmon price and exchange rate, the Norwegian government estimates that the aquaculture industry will contribute NOK 5.7 billion in resource rent tax in 2023, reduced from NOK 8 billion as estimated in the proposal from March.

It still remains to have key questions clarified, such as the independent price board, calculation of the tax base, deductions for costs, and in particular the historical costs for fish set in sea pens in 2021 and 2022.