The resource rent tax will be structured as a cash-flow-tax, with immediate deductions for investments that are solely used during the sea phase.
The Government maintains the proposal for incurred costs associated with the resource rent taxable business in the sea phase, can be deducted from the calculation of the resource rent taxable income. This will typically include costs such as the purchase of stock, feed, prevention and treatment of lice/disease, environmental measures, catching of escaped fish and care. Labour costs and other staff costs, maintenance costs, insurance and administration are included to the extent that the costs are related to the sea phase in the aquaculture business.
The Government maintains that deductions will be granted for investments made prior to 1 January 2023 through depreciation of remaining tax values.
In principle, newly acquired assets can be deducted immediately in the resource rent income, while existing assets must be depreciated for the residual value. In order to prevent this inequality from giving incentives to separate the license in a separate resource rent taxable company from the date of entry into force, the Ministry has proposed that the tax input value of the purchaser be set equal to the residual value of tax at the time of the transfer of existing fixed assets under the group purchase. This implies that the residual value of the assets will be subject to depreciation in the purchaser’s resource rent tax and cannot be deducted immediately.
No deduction will be granted for the value of fish farming licenses. However, a template deduction is given in revenue for licenses purchased on auctions in 2018 and 2020 and allocated at fixed prices in 2020. The deduction is set at 40% of the actual remuneration paid to the central government divided over five years and constitutes a change to what was stated in the consultation proposal.