Norway tax hike puts stop on SalMar’s £20m salmon investment

SalMar has halted the planned purchase of 1,223 tonnes of salmon biomass worth around NOK 245 million (£20m) in protest against the Norwegian government’s land tax proposal.

The purchase was part of a capacity adjustment following the introduction of the traffic light system.

SalMar said the tax move, which will be announced in the budget later this week, meant the government is planning to acquire 40% of all cash flows in the company adding: “This is expressed by the fact that the total tax for aquaculture companies in Norway increases from 22% to 62%.”

The statement added: “If the proposals were to be adopted, there would be major consequences for the company’s investment decisions and capital allocation in the future.

“This has created a situation which means that the company does not find it justifiable to pay the aforementioned remuneration.

“The government’s surprising proposal, without waiting for the recommendation from the government-appointed tax committee, has also led to an unpredictability on the part of the authorities which reinforces the need for a closer evaluation of the company’s future investment strategies.”

Meanwhile, the Norwegian fish transport company Rostein is reported to have stalled an order for two wellboats because it believes the tax proposal is going to lead to lower activity in the aquaculture industry.

The plan to build the wellboats was based on expectation of further growth, which Rostein thinks will not happen if the tax proposals go through.

Other aquaculture related businesses are expected to pull investment plans in the coming weeks.