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TONNAGE TAX REGIME  AT A GLANCE

TT benefits

  • Shipowners of Community flag vessels and foreign flag ships may opt to be taxed under the tonnage system
  • A charterer who charters a ship under BB, a resignation, time or voyage is eligible for the TT system provided it satisfies certain criteria
  • A ship manager who provides crew and / or technical ship management services is eligible for the TT system provided is satisfying certain criteria Why use Cyprus Ship Registry?

 

WHY USE CYPRUS SHIP REGISTER?

 

  • One of the largest registries in the EU and worldwide
  • Availability of provisional registration (valid for 6 months)
  • Availability of two forms of parallel (bareboat) registration allowing chartered ships to be registered under two flags for a period of time
  • Competitive registration fees

 

As of 2010, the new Tonnage Tax (‘TT’) regime applies to qualifying shipowners, shipowners, ship charterers and ship managers of qualifying ships engaged in qualifying activities. The qualifying shipowners, managers and charterers under the TT Regime are exempt from the income tax on their shipping activities such as:

  • Exploitation of a qualifying ship in a qualifying shipping activity or rendering crewing and / or management services to any qualifying ship
  • Disposal of qualifying boat or qualifying hip
  • Disposal of shares in a ship owning company
  • Dividends paid (directly or indirectly) out of the profits described above
  • Banking interest paid on operating capital or shipping revenue, provided that that operating capital or shipping revenue is used to pay the costs incurred by the qualifying person out of the qualifying activity

 

The new TT regime was in line with the European Union’s Guidelines for State Aid to Maritime Transport and authorized the TT regime until 31 December 2019.

TT REGIME ADMINISTRATION

Payable on TT Is 31 st March each year. It is calculated with reference to the net tonnage of qualifying ships under one’s ownership, charter or management.

TT rates  

Any residual tonnage of less than 100 units of net tonnage shall be charged proportionately.

 

ADVANTAGES OF TT REGIME

  • Certainty as to the amount of tax payable each year
  • Wide range of qualifying activities
  • Wide range of qualifying vessels
  • Crew members of qualifying Cyprus flagged (including parallel in registration) ships are exempt from income tax
  • The TT regime can be easily used alongside the income tax if both qualifying and no qualifying activities are conducted.