Aquaculture is a fast-growing business and represents according to the Food and Agriculture Organization of the United Nations (FAO), approx. 50 % of the global fish production that is used for food. It is expected that aquaculture shall continue growing in the future and increase its share of the total global fish production.
Atlantic salmon probably has the highest level of industrialization of all farmed aquatic species.
Salmon farming has been quite profitable over the past few years and there are several large players, some of which are listed companies, multinational companies or both. In addition, there is an increasing focus on the environmental consequences of aquaculture.
Ordinary taxation – Corporate Income Tax rates
Income from aquaculture business is generally subject to ordinary Corporate Income Tax (CIT) at varying rates which ranges from 12.5 % (China and Ireland) to up to 31 % (Canada).
The average CIT rate for the countries presented in this report is approx. 21.8 % - 22.7 %. Please see overview of CIT rates and also relevant country sections in this report for further details.
Special taxes and levies for the aquaculture industry and tax incentives
The increased profitability in the salmon farming industry has drawn the attention of the authorities and in some countries such as the Faroe Islands, Iceland and Norway special taxes and excise duties for aquaculture companies have been implemented or are about to be implemented.
On the other hand, there are countries such as, e.g. China that have implemented tax incentives for the aquaculture industry. In China aquaculture companies are subject to corporate income tax on 50 % of their taxable income. That results in 50 % tax reduction provided that the scope of the business is marine and inland aquaculture.
After this report was finalized in August 2022 there has been a substantial tax update in Norway. On 28 September 2022 the Norwegian Government published a proposal to introduce resource rent taxation for aquaculture companies in Norway, with effect from 1 January 2023. The proposal includes among others a special resource rent tax (effective tax of 40 %), which comes in addition to the 22 % ordinary income tax rate, bringing the marginal tax rate to 62 %. In addition, a significant increase in the excise duty on production of salmon, trout and rainbow trout, and introduction of a new natural resource tax. The proposal has been sent on a public hearing.
Net Wealth Tax
Norway has recently introduced new tax regulations, which have resulted in a significant increase in the valuation (tax basis) of aquaculture licenses when calculating the net wealth tax. This comes in addition to a significant increase in the net wealth tax rate and has resulted in a lot of media coverage and a heated debate.
We have as part of the update of this report for 2022 also included an overview of which countries that have a net wealth tax. Based on this overview there are only two countries that currently have net wealth tax: Norway and Spain. However, in Spain there is an exemption, family business relief, which may apply. Chile is currently considering introducing a net wealth tax, with effect from 2024, which shall apply for net wealth above approx. USD 5 million.
Continuous improvements of the report
This report intends to present a brief country overview of taxation of aquaculture. The first version of this report, which was published in 2019, focused on a few selected countries, representing the largest salmon farming producing countries in the world. In addition, the report included a few countries that had potential to become large future salmon producers, e.g. through investment in land-based aquaculture.
Additional countries, i.e. Greece, Japan and Spain were included in the updated report for 2020. Russia was also added in the updated report for 2021.
Due to war in Ukraine, KPMG decided to leave Russia and there is currently no KPMG member firm in Russia. For this reason we have no description for Russia in the updated report for 2022.
We aim at continuously improving the report, including also to expand the report to include additional countries in future editions. Thus, we welcome any feedback that can contribute to fulfill this goal.
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