The Government proposes to introduce a production tax on farmed salmon, trout and rainbow trout in the National Budget for 2021. The revenues from the production tax shall be split between regional and local governments. The split of revenues from sales of capacity increase is adjusted.
The tax rate is suggested to 0.40 Norwegian krone (NOK) per kilogram produced fish. This provides approximately NOK 500 million to local and regional governments from 2022 and onwards.
The Government suggests that the revenues from the production tax replace parts of the host municipalities’ share of income from sale of new licences, which they have been awarded since 2017 through the Aquaculture Fund. The Government proposes that the regional and local governments are provided a further 25 per cent of future revenues from sales and auctions of aquaculture licences. From this years’ capacity adjustment the Government suggests that NOK 1 billion is allocated to the municipalities in both 2020 and 2021, through the Aquaculture Fund.
The proposal follows up the Norwegian Official Report NOU 2019: 18 Taxation on the fish farming industry.
The Governments’ proposal
- The Government will propose the introduction of a production tax in the National Budget for 2021 on salmon, trout and rainbow trout with a tax rate NOK 0.40 per kilogram produced fish. The revenues are estimated to approximately NOK 500 million. The production tax will be given effect from 1st January 2021 and tax payments are due in 2022. The regional and local governments will receive revenues from 2022 and onwards. The production tax will be channelled to the Aquaculture Fund and disbursed according to the prevailing distribution key.
- Since 2017, host municipalities have received a share of revenues that stems from sales of new licences and increased capacity of existing licences through the Aquaculture Fund. The production tax will include production from existing licences that have been awarded free of charge or well below market value.
- Regional and local governments are provided NOK 1 billion in both 2020 and 2021 throught the Aquaculture Fund.
- From 2022 revenues from sale and auction of capacity increase and new licences will be split between central and local/regional governments, with respectively 75 per cent and 25 per cent.
- A profit-based resource rent tax is not suggested.