SalMar ‘won’t build offshore farms in Norway without ground rent tax’

Salmon farming heavyweight SalMar won’t develop a fully offshore farm in Norway until the government extends its ground rent tax to offshore developments, chairman Gustav Witzøe has said.

Witzøe was speaking to Ole Erik Almlid, chief executive of the Confederation of Norwegian Enterprise, in an interview on stage at seafood organisation Sjømat Norge’s annual conference in Tromsø yesterday.

So-called “ground rent” is a 25% tax on the value added to farmed salmon and trout during the sea phase and comes on top of Norway’s 22% tax on profits, taking the tax level to 47%. Offshore farms will require considerable investment and time before becoming profitable and the rationale for Witzøe’s request appears to be that if offshore farming has a ground rent tax applied now, salmon producers will be able to offset that expenditure against their tax bills, effectively getting a government subsidy to develop offshore.

News outlet DN reported the conference.

All take, no give

“We want to produce the salmon further out to sea. In connection with ground rents, the state/Vedum (finance minister Trygve Slagsvold Vedum) said that ground rent should not be introduced for offshore aquaculture, but that it should not ignore the fact that it could introduce it later when profitability was better. Where is the understanding of how to use natural resources,” DN reported Witzøe saying.

SalMar, which is the co-owner of Scottish Sea Farms, is the majority owner of Aker Ocean AS, a company formed to develop farming of salmon in the open sea.

The company already operates Ocean Farm 1, which was built in China for SalMar. It is located off the coast of Trøndelag at a location that is exposed, but not classed as offshore. Since 2021, SalMar’s plan has been to build sea cages and install them in even more exposed locations and offshore, but Vedum and the government have put a damper on the company’s plans.

Witzøe said SalMar had an ambition to produces 150,000 tonnes of salmon annually into the open sea in 2030.

“Then the politicians come and say that ‘just wait until you have finished investing. Then comes the ground rent tax’.”

“Is it out of the question for SalMar to build offshore in Norway as long as there is no ground rent tax there,” asked Almlid.

“Yes, yes, yes, are you on track? The basic interest will come if the earnings come. It doesn't work,” replied Witzøe, according to DN.