The seafood industry was taken completely to bed when the government announced on Tuesday afternoon that the seafood industry will also be taxed on ground rent. If the government gets its way, the profits of the companies will be taxed at an extra 40 per cent on top of the corporation tax of 22 per cent. Investment director Robert Næss at Nordea believes that the companies will do everything they can to escape the tax that affects the largest players. Investment director Robert Næss predicts that the seafood giants will be broken up into smaller parts if the government gets through with its proposal as it stands. Photo: Nordea Splits up the companies – The practical consequence will be that the companies are split up. There is no reason to pay 62 percent tax if you can get away with 22 percent tax. It’s something people hate, says Næss. He predicts that companies such as Mowi and will sell off parts of the business. – Then you get a bunch of smaller companies instead, he says. Mowi is the world’s largest seafood company with John Fredriksen as the dominant owner. John Fredriksen is the richest Norwegian of all time, living in Cyprus. He is also the largest owner in the world’s largest seafood company Mowi, which will be affected by the government’s new salmon tax. Photo: Ints Kalnins / Reuters The additional tax will only apply to companies that have permits to produce more than 4-5,000 tonnes a year. 7 out of 10 companies produce below this limit, according to the consultation document. The sour tax pill is sweetened a little by the state simultaneously paying a correspondingly larger part of parts of the costs. Most companies plunged between 20-30 per cent in value in the wake of the government’s tax shock. Investors expect earnings in the companies to fall sharply. news has asked the Ministry of Finance whether it is a goal for the government that the salmon giants split up and end up in several hands, but has not yet received an answer to the inquiry. Cuts in investments on land predicted Seafood analyst Carl-Emil Kjølås Johannessen in Pareto Securities predicts that the seafood companies affected by the additional tax will throttle their investments – especially on land plants. – It is natural to think. The companies are left with less money when the state should have a larger share of the pie. Then there is less money to invest, says Kjølås Johannesen. He says that it is currently a bit unclear which parts of the investment costs can be expensed. Carl-Emil Kjølås Johannessen, seafood analyst at Pareto Securities predicts a cut in the seafood companies’ investments on land. Photo: Pareto Because when the state demands a larger part of the income in the form of a tax on the cash flow, the state also takes a larger part of the bill when the costs have to be paid, as a kind of co-investor. – As far as I understand, it only applies to what happens in the sea phase. So if, for example, you invest in onshore facilities, processing or smolt production, you will not get that deduction on the investments. This will mean that the companies invest less in this type of equipment, which of course creates jobs along the coast, says Johannessen. Loss of value of NOK 55 billion The government’s proposal to introduce a ground rent tax of 40 per cent in aquaculture for the largest companies is, according to the government’s calculations, to bring in up to NOK 3.8 billion into the treasury annually. The value of the seafood companies on Oslo Børs fell by more than a fifth after the government’s announcement of the introduction of ground rent tax for the salmon companies. Seafood giants such as Mowi, Salmar, Lerøy and more plunged in value. In total, the value of the largest companies fell by more than NOK 55 billion, after the worst stock market day ever, according to the industry website Ilaks.no. On Thursday, most seafood companies fell further on the stock exchange, but the price falls were far more modest.
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Traces that the salmon tax leads to the splitting up of the seafood giants – news Norway – Overview of news from different parts of the country
