Norway set to scrap controversial aquaculture Price Council

Norway is poised to abolish its Price Council for aquaculture, following cross-party support for a proposal to change the country's way of calculating taxes for the sector from 2027 onwards.

The Price Council, an independent body appointed by Norway's Ministry of Finance, sets binding prices for salmon, trout and rainbow trout producers used to calculate the resource rent tax on aquaculture - the so-called "salmon tax". The council calculates benchmark prices after sales have taken place, using reported sales data from producers, company input and wider market information.

The proposal to dissolve the body, presented to the Norwegian Parliament by the Conservative Party, has already garnered support from a cross-party majority, and formal adoption is expected today when Norwegian lawmakers cast their votes at the Storting.

The proposal would see the government obliged to change the rules so that the aquaculture tax would be, in its words, "assessed based on real market prices, similar to corporate tax, and that the current arrangement with a price council be discontinued."

The council has remained a bone of contention amongst industry stakeholders since its introduction was announced in November 2023 by the then Minister of Finance Trygve Slagsvold Vedum.

"Experience shows that the price council scheme does not work. The scheme has been criticized for the reporting burden and for giving incorrect and more uncertain taxes," the proposal submitted to the Storting argues.

Instead, the proposal reads: "Taxation of aquaculture should follow the principle that companies pay tax based on real income and costs. Norway has a robust transfer pricing framework. The proponents believe that a better solution is to use this framework. The Tax Administration has the authority to impose additional tax if operators do not provide sufficient transparency, and can determine income at its discretion where there is a common interest."

However, current Price Council members have argued against abolition. In an op-ed published in Norwegian newspaper DN, Prof. Claire Armstrong, Prof. Jarle Møen and Price Council Chair Ola Oldernes argued that much of Norway’s farmed salmon is traded within large, vertically integrated companies, meaning internal transfer prices may be used rather than prices from independent third-party sales.

“The alternative to standard prices is therefore not real market prices,” they wrote.

They also warned that abolishing norm prices could create a greater risk for taxable sea-phase income to be reduced, while increasing the need for transfer pricing documentation and tax audits, as well as the risk of potential disputes.

Meanwhile, Norwegian seafood industry association Sjømat Norge (Seafood Norway) welcomed the move, describing it as "an important day for the coast and the aquaculture industry."

"This is very pleasing. We have long warned that the norm price council has created unnecessary bureaucracy, increased uncertainty and weakened trust between the industry and the authorities. The fact that a majority will now discontinue the scheme is an important and right step," said CEO Geir Ove Ystmark, who claimed the council "has been on the wrong track from the start."

Ystmark argued that taxation of the aquaculture industry "must be based on real income and controlled through the Tax Administration's ordinary mechanisms," and said that eliminating the price council would simplify procedures, particularly helping small and medium-sized companies for which, he argued, the reporting and documentation requires significant resources.

"Norwegian aquaculture needs stable, understandable and competitive framework conditions. This decision is an important step in the right direction. We now expect the government to follow up on the Storting's order quickly," he said.

Regional leaders from Norwegian business confederation NHO also welcomed the expected decision.

In a joint statement, NHO directors from Norway’s main coastal aquaculture regions said uncertainty around the resource rent tax and norm price system had affected investment confidence and placed additional reporting demands on companies. They argued that clearer tax rules were needed to support long-term investment, jobs and supplier activity in coastal communities.

“This is about giving companies room to work. Aquaculture is capital-intensive, technology-intensive and long-term. Several parts of this industry are global frontrunners that deserve support, particularly in light of the transition we are facing. But for that, operators need framework conditions that make it possible to plan ahead,” said Sondre Olsen, acting regional director of NHO Vestland.