The appetite for taxing aquaculture is growing

New report shows that the focus on taxing the aquaculture industry is growing

The report "A growing appetite for taxation of aquaculture" is the latest in the series "Taxation of Aquaculture" which has been published annually since 2019 and contains data from 15 aquaculture-producing countries. The purpose of the report is to provide an overview of the taxation of the aquaculture industry globally. The report maps taxes and fees imposed on the industry, as well as tax rates and exemptions that apply in different countries.

According to the Food and Agriculture Organization of the United Nations (FAO), aquaculture is becoming increasingly important in meeting the growing global demand for sustainable seafood. Global aquaculture production has increased at an annual average rate of about 5 % since 2010. Aquaculture is expected to continue growing in the coming years, driven by an increasing demand for sustainable seafood, as well as technological advancements.

Pedro S. Leite

Partner | Advokat

KPMG in Norway

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A growing appetite for taxation of aquaculture

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The report shows that Norway has the highest tax level on aquaculture compared to the other surveyed countries.

– Although the report shows that income from aquaculture is usually subject to ordinary corporate tax, Norway stands out by imposing both production tax, net wealth tax, and resource rent tax on the industry. The resource rent tax has led to Norway having by far the highest tax level among the surveyed countries, says lawyer and partner Pedro S. Leite at KPMG Law.

Leite points out that the focus on taxing the industry is increasing in several countries, such as Iceland and the Faroe Islands. This can be seen in connection with the profitability of the aquaculture industry increasing in recent years for these countries.

While aquaculture is sustainable food production, the industry faces a number of challenges related to, among others, the environment and fish health. To solve these challenges, significant investments will be required in developing production technology. An excessive tax burden can lead to fewer investments in production technology and thus affect the level of future production. The FAO has estimated that the resource rent tax on aquaculture, which was introduced in Norway from 2023, could lead to a reduction in aquaculture production in Norway by about 9 % by 2032.

– It is a paradox that the authorities are increasing taxes without introducing incentives to increase aquaculture production. This may come at the expense of the FAO's goal of a global increase in aquaculture to ensure sustainable food production in the future, says Leite.

Key findings

Norway has the highest tax level on aquaculture of the surveyed countries and is also the only country to have introduced resource rent tax on aquaculture.
In all the surveyed countries, income from aquaculture activities is subject to corporate taxation, and rates vary from 12.5 % (in China and Ireland) to up to 47 % (in Norway). The average for the surveyed countries is between 21.2 to 24.8 %.
Norway, the Faroe Islands, and Iceland are the only surveyed countries that have special taxes or fees for aquaculture producers.
There are examples of countries having introduced tax incentives to increase aquaculture production. For example, China has a 50 % tax reduction for marine or inland aquaculture.
Norway and Spain are the only countries that have net wealth tax. However, the Spanish regulations contain some exceptions for family businesses.