Trygve Slagsvold Vedum, Norway's Minister of Finance.
Trygve Slagsvold Vedum, Norway's Minister of Finance. Photo: Norway Ministry of Finance.

Salmon tax latest: Norway to create "price council" for aquaculture

The new council is expected to be appointed before Christmas, and will have power to set binding prices for salmon in order to calculate what income is subject to Norway's ground rent tax.

Norway will appoint a "price council" for aquaculture before Christmas, the Minister of Finance Trygve Slagsvold Vedum confirmed on Friday 24 November.

The council will be able to set binding prices for the salmon industry, to enable the Norwegian state to calculate income subject to the new ground rent tax - the so-called "salmon tax".

The pre-defined prices set by the council will take effect from July 2024, and until then, the companies will still be responsible for calculating their income taxable under the ground rent tax rules.

Norway to take its existing Petroleum Price Council as the template for new aquaculture council

The idea of the price council, the Ministry of Finance said, is to "simplify" the method of determining tax owed by salmon producers, thereby "saving resources both for the industry and the tax authorities". It will also "reduce the possibility of tax-motivated adjustments".

Norway already has a similar body to enable standardised tax calculation for its oil and gas industry, the Petroluem Price Council, which sets the reference prices for crude oil and natural gas produced by the country.

The new Aquaculture Price Council's task will be to determine market values for salmon, trout and rainbow trout, which producers will then use as the basis for calculating gross rent income. To define the standard prices, the council will use information submitted by fish farming companies and other available market data as a starting point, the Ministry of Finance said.

Candidates for Aquaculture Price Council include seafood industry representatives

Vedum said he expected the membership of the council to be defined before Christmas. During the consultation period, the ministry had received proposals for candidates from Seafood Norway, various seafood companies and different educational institutions, he said.

"We have received good input and I am confident that we will get a competent pricing council in place," Vedum said.

"Just like the Petroleum Price Council, I believe that the price council for aquaculture will be a good arrangement both for the companies and for the community," he added.

Norway's seafood industry remains sceptical of the idea

However, the idea of an aquaculture price council has been heavily criticised by industry representatives in the months before Friday's formal announcement that it is actually going ahead.

Prominent among these critics was Geir Ove Ystmark, the CEO of trade body Seafood Norway, who has warned that the price council risks salmon companies being required to pay tax on income they did not actually make.

Speaking to Norwegian business media outlet E24 in August, Ystmark argued that salmon farming and oil production are not comparable industries, and that the complexity of the supply chain in aquaculture means that successfully pre-defining prices is "unfeasible".

Companies previously warned by Norway's tax authority over incomplete accounts

During the summer, half-yearly financial reporting reflected salmon producers' uncertainty over how much income would actually be subject to tax. For example, SalMar CFO Ulrik Steinvik noted there remained "significant uncertainty over how it shall be calculated", thus the company had not included an estimate on the ongoing resource rent tax costs in its H1 report.

However, incomplete reporting has prompted Norway's tax authority to wade into the debate. At the beginning of October, the Norwegian Financial Supervisory Authority Finanstilsynet warned some of the country's biggest salmon producers over incomplete tax accounting. The communication was sent to five companies: Mowi, Salmar, Grieg Seafood, Lerøy Seafood Group and Austevoll Seafood.

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