Norway to tax onshore wind farms from 2024

Norway will introduce a resource rent tax on onshore wind farms from next year. After strong criticism, the government has lowered the tax rate compared with its original proposal last year and softened the impact on existing wind farms.

Under last year's proposal, the Norwegian government planned to introduce a resource rent tax for new and existing onshore wind farms from as early as 2023. However, the consultation process drew strong criticism from stakeholders, who questioned the legality of the rapidly introduced proposal and said it would destroy older wind farms and undermine investor confidence.

In response to these concerns, the government decided to revise the proposal and has now submitted a bill to parliament that would take effect in 2024. The government proposes an effective tax rate of 35%, structured as a cash-flow tax with the immediate deduction of investment costs. The original proposal envisaged an effective tax rate of 40%.