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CORRECTION: UPDATE on Revenue tax on salmon farming in the Faroe Islands

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With reference to the press release from Bakkafrost on 30 September 2022 mentioning expected changes to the Revenue Tax in the Faroe Islands. (ref. NewsWeb (oslobors.no))

The recently elected Faroese Government has announced their proposal to adjust the revenue tax for the salmon farming industry, effective from 1 August 2023, if passed as is by the Parliament. The proposal is currently out for hearing with the salmon farming industry until 16 March 2023. Parallel hereto, the opposition has also re-proposed their original proposal they put forward to the Parliament in September 2022, but which was not up for voting before the election in December. This proposal is now with the Parliament. 

The new proposal from the Government, which currently is out for hearing with the salmon farming industry, builds on the same principles as the previous Government’s proposal in which different tax rates should be applied, dependent on the difference between the monthly FishPool Index prices and the annually assessed average production cost for the Faroese salmon industry. However, in the new proposal, the tax rates continue beyond the 10% proposed from the previous Government (now opposition) and stretch to 20% when the FishPool Index prices exceed industry production cost + 40 DKK/kg. In total 9 tax rates are propoposed between 0.5% and 20%. The average production cost for 2021 is proposed as baseline, which is set to be 39,15 DKK (around 59 NOK/kg). Hence, a FishPool Index price exceeding around 119 NOK/kg would result in the maximum tax rate of 20%.

The proposed tax rates are as follows:

FishPool Index Price (P)
Cost of production (K)         Tax Rate
(all in DKK)

P    <  K                         0.5%
K    <= P < K+5                   2.5%
K+5  <= P < K+15                  5.0%
K+15 <= P < K+20                  7.5%
K+20 <= P < K+25                 10.0%
K+25 <= P < K+30                 12.5%
K+30 <= P < K+35                 15.0%
K+35 <= P < K+40                 17.5%
P    >  K +40                    20.0%

The proposed changes, outlined in this press release, have not yet been passed by the Parliament.

Contacts:

  • Regin Jacobsen, CEO of P/F Bakkafrost: +298 23 50 01 (mobile)
  • Høgni Dahl Jakobsen, CFO of P/F Bakkafrost: +298 23 50 60 (mobile)

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

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