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Yesterday, January 1, 2023, started to apply the new salmon tax in Norway. Just before the end of 2022, Nordlaks announced that it was transferring its fish farming permits to a new company, Nordlaks Havbruk. “The government’s new cash flow-based salmon tax will only apply to one part of the value chain; farming of salmon fish in the sea, excluding development permits etc.”, they explained in a release. “A new tax model places new demands on the company structure and organization of the Nordlaks companies. The aim of the reorganization is to document the value creation and thus the tax base that arises in the part of the value chain subject to ground rent tax”, they added.
Highlighting all costs and all income
“The tax model is to be adopted in the Storting in the spring, but has been notified to have retroactive effect from 1 January 2023. Thus, in principle, the authorities are asking us to prepare for the transition to a new tax system already now, even though no one knows what will be adopted. We separate out the part of the value chain subject to land rent tax in a separate company, so that we have the opportunity to highlight all costs and all income from this business in the best possible way. The changes are made within the relevant regulations and reported to the authorities in the usual way”, said CFO Bernt Ola Nilsen at Nordlaks.
According to Nordlaks’ statement, the company has already spent “considerable resources” mapping the consequences of the government’s proposal. That includes planning how the company will be able to make visible and report value creation in businesses subject to land income tax, one of the most contentious points surrounding the Norwegian government’s salmon tax proposal.
“The government has been clear that the salmon tax is coming, that it should have a neutral effect on investments and with deductions for relevant costs. A new tax regime will be introduced for the aquaculture sector, and then there will be a different tax regime for the other businesses. This requires us to be able to respond to new reporting requirements, document costs, income and contracts. In short, we must give the authorities correct figures as a basis for the new tax”, Nilsen concluded.
New company created
As said, this reorganization means in practice that Nordlaks creates a new company, Nordlaks Havbruk. “Relevant assets, personnel and food fish permits are moved here”, the company stated, adding that Nordlaks Oppdrett continues as a service provider to the new business.
In the same release, the company said it has hired Bjarne Johansen as the new chief operating officer of Nordlaks Havbruk. Johansen was until now serving as head of development projects and fish health at Nordlaks. He now joins the company’s management team and reports to CEO Eirik Welde. However, these are not the only adjustments announced by the Berg family company.
The Norwegian salmon producer – which back in June already decided to diversify and invest part of the money set aside to buy a grow-out permit in Norway at autumn’s auction in land-based salmon producer Atlantic Sapphire – has now said that, as of the new year, its sales activities will also be organized in a separate company. If previously sales were part of Nordlaks Produkter, now they will be conducted through Nordlaks Sales. “This reorganization was part of Nordlaks’ budget process for 2023, and was planned before the government’s press conference on 28 September”, the company said in its announcement.
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