Norway's biggest salmon farming companies have received a shot over the bows this week from the Norwegian Financial Supervisory Authority Finanstilsynet, which has taken them to task over their tax reporting during 2023.
The authority has set its sights on Norway's five biggest salmon producers, Mowi, Salmar, Grieg Seafood, Lerøy Seafood Group and Austevoll Seafood.
On Tuesday 3 October, all five Oslo Stock Exchange-listed companies received identical letters from Finanstilsynet.
The Norwegian-language letter says that all five companies have not followed the correct procedures in reporting income tax in their interim financial statements, following the implementation of the resource rent tax for aquaculture in Norway – the so-called "salmon tax".
In their half-yearly reports, the letter points out, the companies "have only recognized tax expense / deferred tax for the implementation effect of resource tax and have not recognized income tax for the period's result."
According to Norwegian tax law, "a company should apply the same accounting policies in the interim financial statements as in the annual financial statements".
However, the letter notes, the five salmon companies all cite "uncertainty" as justification for incomplete reporting on the income tax effects from the implementation of the new resource rent taxation regime.
The effects of the new tax, the letter continues, is "significant for recognition, measurement, and/or disclosure in the companies' financial reporting."
"If income tax for the period's result is not recognized in the financial statements, the Financial Supervisory Authority cannot see a complete estimate of the effect of the resource tax," the letter warns.
The tax authority says it expects all five companies to determine an estimate of income tax for the period "as early as possible".
It also expects companies to "assess their accounting for resource tax against relevant accounting rules, including recognition and measurement of income tax for the period's result."
"Companies must also consider the requirements for disclosure and ensure compliance with applicable disclosure requirements, including whether matters related to resource tax constitute a significant event in the period, a significant judgment, and/or a significant estimate," the letter warns.
The five companies in question have yet to issue an official response to the letter. However, all of them have previously expressed fierce opposition to the resource rent tax, freezing capital investments within Norway or estimating significant financial fall-out from the tax running into billions of kroner.
Most recently, both Mowi and SalMar have made headlines by threatening to take legal action over the tax.