Norway’s financial regulator has written a letter to country’s salmon farming companies insisting they include an estimate of income tax for the period’s result related to so-called salmon tax as soon as possible.
Norway’s Financial Supervisory Authority (Finanstilsynet) has raised concerns over the accounting of salmon tax by some of the country’s leading seafood companies, including Mowi, Salmar, Grieg Seafood, Lerøy Seafood, and Austevol Seafood.
In a letter sent to the companies on Tuesday, Oct. 3, Finanstilsynet pointed to inconsistencies in the half-yearly reports for 2023. The regulatory body noted that the companies included only the tax costs or deferred tax for the implementation effect of basic interest tax, neglecting to include the income tax for the period’s result.
The new 25 percent tax on salmon production was introduced by the Norwegian parliament in May, backdated to the start of 2023.
This controversial tax, which was first mooted in September last year, has been widely criticised and blamed by suppliers for a damaging slow-down in investment across the country.
The financial regulator shot down the companies’ justification of their stance, which they base on the uncertainty of estimating income tax for the period’s result, and thus chose to exclude it from the half-yearly reports.
In the letter Finanstilsynet has hit back, insisting the companies determine and include an estimate of income tax for the period’s result related to ground rent tax as soon as possible.
With income tax pegged at 22 percent, this oversight could imply significant financial implications for these companies.
The companies are yet to respond to the regulator’s letter. The unfolding events will be closely monitored by investors, regulatory authorities, and other stakeholders with the development holding the potential to significantly impact the financial standing and investor confidence in the companies.