UPDATE on Revenue tax on salmon farming in the Faroe Islands

 

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) (https://newsweb.oslobors.no/message/572197))

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