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 legislation allows non community vessels to enter the tonnage tax regime provided the fleet is composed by at least 60% community vessels. If this requirement is not met, then non community vessels can still qualify if certain criteria are met. The legislation includes an “all or nothing” rule, meaning that if a shipowner/ charterer/ shipmanager of a group elects to be taxed under the Tonnage Tax regime, all shipowners/ charterers/ shipmanagers of the group should elect the same.
Exemption is also given in relation to the salaries of officers and crew aboard a Cyprus ship.
Tax rate | |
Shipowners
|
Exempt from corporation tax and subject to Net Tonnage Tax |
Shippers
|
Exempt from corporation tax and subject to Net Tonnage Tax |
Ship Managers
|
Exempt from corporation tax and subject to Net Tonnage Tax |
|
12,50% |
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 |
Notes:
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