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Greek shipowners look overseas as tax concerns mount

Greek shipowners look overseas as tax concerns mount
The Piraeus waterfront is rife with rumours a number of the community’s most prominent members are activating “Plan B” and are in the process of moving their operation, and home, from Greece.

This in turn has had a ripple effect on the Greek cluster as a whole as concern grows over what the Syriza government has in store for the maritime industry in the months to come.

In recent days this correspondent has had first-hand experience of the unease within the ship owning community with some of the cluster’s traditional pillars expressing major concerns over the names of those said to be in the process of moving. The lesser names are unsettled about reports of ‘the big boys’ are actively looking for premises and homes outside of Greece.

At the heart of shipping’s concern is tax. The community has accepted a Union of Greek Shipowners (UGS) negotiated increase in tonnage tax, although the UGS points out companies located in Greece pay the highest tax rates in the EU and the taxes are higher than their Asian and US counterparts.

UGS three-term president, Theodore Veniamis, has repeatedly stated any change in the existing tax regime will force owners to seek a friendlier tax environment abroad. Veniamis, though, was mainly referring to tax benefits Greek shipowners enjoy, such as no taxes on profits from shipping operations, or ship sales. These benefits are currently guaranteed in the country's constitution and changing them would require a two-thirds majority in parliament.

But owners believe the government's fiddling will eventually lead to an unstable tax regime.

“The names of those said to be on the move is alarming,” said one leading Piraeus waterfront stalwart. He went on: “Some of them have been working through the union [UGS] with the government to ensure shipping gets a fair deal regarding new tax legislation. It makes one wonder if they know something we do not.”

Though Prime minister Tsipras has often said he favours a strong national shipping sector, many leading shipowners have had a Plan B in place for months. This has encouraged international administrations to come to Greece and explain what they have to offer as maritime centres and services for the worlds' leading shipping community. Led by Cyprus, the suitors include Singapore, London, the United Arab Emirates, Canada, The Bahamas and even Luxembourg.

Owners have beefed-up their overseas offices for months, but now there are signs a number of leading owners are putting Plan B into practice, with Cyprus the main gainer. In recent weeks, at least three leading owners are said to have rented office premises and accommodation in Limassol, with the aim of being out of Greece by 31 December, the end of the Greek fiscal year.

Indeed, the Cypriot government is drawing up a new law to exempt children of shipowners who set up home on the island, from army duty. According to reports, the law will stipulate the exemption applies as long as the families of shipowners move to the island and transfer their shipping business to Cyprus.