With reference to the press release from Bakkafrost on 28 September 2022 mentioning expected changes to the Revenue Tax in the Faroe Islands. (ref. NewsWeb (oslobors.no))

Today, the Faroese Government has officially presented to the Parliament a proposal to adjust the Faroese Revenue Tax on the salmon farming industry. This proposal includes three important changes to the current Revenue Tax system, originally introduced in 2014:

  • Changing the number of applicable tax rates from 3 to 5
  • Increasing the salmon price thresholds that determine when each tax rate is applicable
  • Linking the salmon price threshold to the average production cost for the Faroese salmon industry, which will be assessed annually.

Overview of the changes:

Current Revenue TaxProposed Revenue Tax
Applicable tax rateApplicable when avg. monthly salmon spot price isApplicable when avg. monthly salmon spot price is
Higher than.....and less than
0.5% Less than 32 DKK/kgProduction cost*
2.5%32-36 DKK/kg Production cost* Production cost* + 5 DKK/kg
5.0%36 DKK/kg Production cost* + 5 DKK/kg Production cost* + 15 DKK/kg
7.5%Production cost* + 15 DKK/kg Production cost* + 30 DKK/kg
10.0%Production cost* + 30 DKK/kg

* The thresholds are based on the average annual production cost for the Faroese salmon industry. For 2023, an average production cost of 39.15 DKK/kg will be applied.

For 2023, the proposed change means that the revenue tax rates would be:

  • 0.5% if the salmon spot price is less than 39.15 DKK/kg (approx. 55 NOK/kg)
  • 2.5% if the salmon spot price is between 39.15 and 44.15 DKK/kg (approx. 55-62 NOK/kg)
  • 5% if the salmon price is between 44.15 and 54.15 DKK/kg (approx. 62-76 NOK/kg)
  • 7.5% if the salmon price is between 54.15 and 69.15 DKK/kg (approx. 76-97 NOK/kg)
  • 10% if the salmon price is above 69.15 DKK/kg (approx. 97 NOK/kg)

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.

https://news.cision.com/bakkafrost/r/update-on-revenue-tax-on-salmon-farming-in-the-faroe-islands,c3640725

(c) 2022 Cision. All rights reserved., source Press Releases - English