Norway to tax foreign aquaculture on the continental shelf

Norway's Ministry of Finance announced yesterday its intention to tax both foreign companies and foreign workers with income from aquaculture on the Norwegian continental shelf. This follows the taxation of foreign companies' business income from activities related to mining, renewable energy, and carbon management also on the shelf, which was already introduced in the 2024 state budget.

Now, in addition to activities and workers related to fish farming, the Norwegian Government also intends to extend taxation to foreign workers who have income related to these other activities on its continental shelf.

The proposal was submitted for consultation yesterday and will be open for comments until June 17, 2024.

Equal treatment of Norwegian and foreign companies and workers

Regarding the activities covered by the proposal, in its announcement, the Ministry of Finance noted that while the income of companies and individuals that are already resident or domiciled in Norway is taxable, there is currently no provision in the tax law for taxing foreign companies and individuals operating or participating in aquaculture activities on the continental shelf.

"This is something we want to change," said Norwegian Minister of Finance, Trygve Slagsvold Vedum. "We want to ensure that the community receives its rightful share of the value created from the exploitation of our common natural resources. The proposal also facilitates equal treatment of Norwegian and foreign companies and workers."

In 2024, Norway has already introduced similar taxation for foreign companies involved in mineral activities, exploitation of renewable energy resources - offshore wind energy - and carbon management in the 200-mile zones and on the Norwegian continental shelf. However, taxation for foreigners' employment income related to these activities was postponed.

Norway's right to tax income derived from its natural resources

According to the Ministry of Finance, the proposal on taxation of aquaculture activities that it is now submitting will be in addition to such taxation for mineral activities, etc., and together they will secure Norway's right to tax income derived from its common natural resources.

"The emergence of new industries means that there is expected to be greater activity on the Norwegian continental shelf in the time ahead," stated Minister Vedum, who was also one of the driving forces behind the salmon tax. "We want to ensure that the community receives a fair share of the value creation of foreign companies in Norwegian areas, and therefore make some necessary tax measures to ensure national control."

For both companies and foreign individuals covered by the proposals, the tax rules on ordinary income taxes under Norwegian tax law will apply, i.e. a tax rate of 22 percent. The Government wants the changes to take effect from and including the income year 2025.