Shipping Companies Tax 2015

As from 24th March 2010, the Tonnage Tax System (TTS) was introduced with the Merchant Shipping (Fees & Taxing Provisions) Law 44(I) of 2010 with effect as from 1 January 2010.
The new TTS covers Maritime Transport activities offered in international shipping, namely Ship owning, Ship management (including Crew Management and/or Technical Manage­ment) and Chartering.

The tonnage tax for a qualifying ship owner and charterer is calculated on the net tonnage of a ship in accordance with the rates outlined in the table:

Note 1

The exemption also applies to bare boat charterer of a vessel flying the Cyprus flag under parallel registration.

Note 2

The law grants the exemption provided that the option to register for Tonnage Tax is exercised for all vessels and provided a composition requirement is met: at least 25% (reduced to 10% under conditions) of the net tonnage of the vessels owned or bare boat chartered in.

Note 3

In order to qualify shipmanagers must satisfy the below additional requirements:

·  Maintain a fully-fledged office In Cyprus with personnel sufficient in number and qualification

·  At least 51% of all onshore personnel must be community citizens

·  At least 2/3 pf the total tonnage under management must be managed within the community(any excess of 1/3 is taxed under the corporation tax)