Oslo government cuts salmon tax rate to 35%

The Norwegian government today unveiled its new salmon ground rent tax plans, lowering the rate from the original 40% to 35%.

Prime Minister Jonas Gahr Støre and Finance Minister Trygve Vedum announced their proposals at a special press briefing this morning and said they will be presented to King Harald V in cabinet later today.

They will eventually go before the Storting, Norway’s parliament, when MPs are expected to vote it into law. The tax is retrospective, taking effect as from 1 January this year.

Salmon companies already pay corporation tax at 20%, so their new full rate, after certain deductions, will be 57% instead of the 62% suggested at the budget in September.

The announcement said: “The [35%] rate will be based on the market value of fish at the end of the cage [production cycle], which the companies themselves set for 2023. From 2024 we aim to establish an independent price council.

“A minimum deduction [tax-free threshold] of NOK 70m (£5.5m) means that only companies with significant profits will pay the basic interest tax.”

The announcement also said that half the income from the tax will go to the municipal in the location of the farms, adding that these local authorities should be better off as a result.

Prime Minister Støre told journalists that although the basic model remained, the government, in coming up with the lower rate, had listened to input from an earlier general consultation.

He described it as a business-friendly proposal and said if the Conservatives opposed it, they would be seen the party less friendly to business.

Støre said the amended scheme should ensure continued growth for Norway’s salmon and trout farming sector.

The government also wanted to ensure that the host municipalities and county council should receive a higher share of the proceeds.

The salmon industry is still studying the plan and its full reaction is awaited. However, early comments from some managers described the changes as small.

Sparebank 1 Markets said that the industry had already factored in a lower rate of 30-35%, adding that the most negative aspect is that prices will be decided by a special council. This could mean, the bank said, that companies could be levied at too high a price on occasions.

 

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