TONNAGE TAX REGIME AT A GLANCE
- Ship owners of community flag ships and foreign flag ships may opt to be taxed under the tonnage system
- A charterer who charters a ship under BB, demise, 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 satisfies 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 enabling 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 the qualifying ship owners ,ship owners, ship charterers and ship managers of qualifying ships engaged in qualifying activities .The qualifying ship owners, managers and charterers under TT Regime are exempt from income tax on their shipping activities such as:
- Exploitation of a qualifying (chartered) ship in a qualifying shipping activity or rendering crewing and/or management services to any qualifying ship
- Disposal of a qualifying ship or interest or share in the qualifying hip
- Disposal of shares in a ship owning company
- Dividends paid (directly or indirectly) out of the profits described above
- Bank interest earned on working capital or shipping revenue ,provided that the said working capital or shipping revenue, is used to pay expenses arising to the qualifying person out of the qualifying activity
The European Commission considered that the new TT regime is in line with the European Union’s Guidelines on State Aid to maritime transport and authorized the TT regime until 31 December 2019.
TT REGIME ADMINISTRATION
TT is payable on 31st March each year. It is calculated with reference to the net tonnage of the qualifying ships under one’s ownership, charter or management .
Any residual tonnage of less than100 units of net tonnage shall be charged proportionally.
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
- Submission of TT can be effected electronically TT regime can be easily used alongside income tax if both qualifying and no qualifying activities are conducted.