Taxation of aquaculture companies in Norway
This section provides an overview of the Norwegian tax framework applicable to aquaculture companies, including the resource rent tax introduced in 2023.
General tax framework
Aquaculture companies operating in Norway are subject to the standard corporate income tax regime, with a corporate income tax rate of 22% levied on net taxable profits. Taxable income is determined based on actual realized income rather than regulated or benchmark prices. Costs incurred for the purpose of generating taxable income are generally deductible. Capital expenditures are capitalized and depreciated over their useful life, typically using declining-balance depreciation, while aquaculture production licenses are recognized as intangible assets and are generally not depreciated for tax purposes.
Resource rent tax on aquaculture
A resource rent tax for aquaculture was introduced with effect from 1 January 2023. The tax applies in addition to ordinary corporate income tax, and the tax rate is set to 25%, resulting in a combined effective marginal tax rate of approximately 47%. The system is designed to tax "excess returns" derived from access to marine resources.
Aquaculture companies are also subject to a production fee based on volume of output.
Key features of the resource rent tax regime
Scope of the resource rent tax
- The resource rent tax applies to profits generated from ordinary commercial aquaculture licenses for salmon, rainbow trout and trout
- Certain activities are excluded from the regime, including aquaculture of other species, land-based aquaculture operations, offshore aquaculture, and licenses issued for special purposes such as R&D and tourism
- Companies providing services to the aquaculture sector, such as well boat operators, are also outside the scope of the tax
Value Chain
Illustrations copied from: regjeringen.no – NOU 2019:18 (2019) Taxation of Aquaculture Activities. Ministry of Finance
Calculating the resource rent tax
- Gross income from sales of salmon is calculated using standardized market prices ('norm prices'). From 2027 the norm prices will be abolished, and the gross income will be based on actual sales prices
- The resource rent tax is partly structured as a cash flow tax as the regime allows for immediate deduction of qualifying investments in the income year in which they are incurred, rather than requiring depreciation over time
- A group-level tax-free allowance of NOK 70 million per year applies, although this allowance has been criticized for potentially undermining tax neutrality
- Negative resource rent tax positions do not give rise to a cash refund; however, losses may be carried forward and are uplifted annually by a risk-free interest rate
Transfer pricing considerations
Transfer pricing is of particular relevance under the resource rent tax due to significant differences in effective tax rates between activities within and outside the regime. This creates an increased risk of tax base shifting, for example through pricing of goods, services, and intangible assets.
Many industry participants are fully integrated and control substantial parts of the value chain, from broodstock and smolt production through grow-out, harvesting, processing and sales. This full integration increases transfer pricing complexity and places heightened requirements on robust functional and risk analyses.
Norwegian tax authorities are expected to place increased scrutiny on transfer pricing in the aquaculture sector.
Political risk
The resource rent tax was introduced following a political process with significant debate, and certain elements of the regime have been criticized for lack of neutrality. While the current framework remains in force, future adjustments to the regime cannot be ruled out.
Investments in Norwegian aquaculture companies – taxation of foreign investors
- Foreign investors are generally not subject to Norwegian taxation on capital gains from the sale of shares in Norwegian aquaculture companies.
- While withholding tax may apply to dividend payments to foreign recipients, exemptions are generally available for EEA-based investors.
- Norway also has an extensive network of tax treaties which may mitigate or reduce withholding tax on dividends to foreign non-EEA based investors.
Key contacts
Camilla Bergby
PARTNER // ADVOKAT
