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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.

 

Tax rate

  1. profits of a qualifying ship owner from shipping operations
  2. dividends paid directly or indirectly from such profits
  3. profits on the sale of the ship
  4. Interest earned on funds used as working capital or for the financing, operation and / or maintenance of the ship

Exempt from corpora­tion tax and subject to Net Tonnage Tax

  1. profits of a qualifying charterer from shipping operations
  2. dividends paid directly or indirectly from such profits
  3. Interest earned on funds used as working capital or for the pay ment of expenses arising out of the charter party

Exempt from corpora­tion tax and subject to Net Tonnage Tax

  1. profits of a qualifying ship manager from the provision of crew/or technical ship management services
  2. dividends paid directly or indirectly from such profits
  3. interest earned on funds used as working capital or for the payment of expenses relating to the management of the ship

Exempt from corpora­tion tax and subject to Net Tonnage Tax

• Profits on operations or charterer of non-qualifying ship operations

12.5%

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:

Net Tonnage (NT)

0 - 1.000

1.001 - 10.000

10.001 - 25.000

25.001 - 40.000

40.001 & over

€36.50 per 100 NT

€31.03 per
100 NT

€20.08 per
100 NT

€12.78 per
100 NT

€7.30 per
100 NT

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)

More in this category: Corporate Tax 2015 »

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