Faroese government has presented a proposal that seeks to adjust its revenue tax on the salmon farming industry from next year.
Its proposal, which would need to be approved by parliament, includes three key revisions to the current revenue tax system that was originally introduced in 2014. Essentially, it calculates the tax due using the spot price value of the harvested fish.
The planned changes are:
- Increasing the number of applicable tax rates from three to five
- Increasing the salmon price thresholds that determine when each tax rate is applicable
- Linking the salmon price threshold to the average production cost for the Faroese salmon industry, which will be assessed annually
Thresholds are based on the average annual production cost for the Faroese salmon industry. Currently, an average production cost of DKK 39.15 per kg will be applied in 2023. If passed, the proposed change would mean that the revenue tax rates will be:
- 0.5% if the salmon spot price is less than DKK 39.15 per kg
- 2.5% if the price is between DKK 39.15 and 44.15 per kg
- 5% if the price is between DKK 44.15 and 54.15 per kg
- 7.5% if the price is between DKK 54.15 and 69.15 per kg
- 10% if the price is above DKK 69.15 per kg
As reported by WF, Norway’s government has proposed the introduction of a new 40% resource rent tax on salmonid farming with effect from 1 January 2023. This will take the industry’s overall tax rate from 22 to 62%.
