In the case of Cyprus it means the prolongation of the decade-long Cyprus shipping taxation system for another 10 years and is seen as the result of close cooperation and the coordinated between the country’s Shipping ministry, government agencies, the Cyprus Shipping Chamber and the Cyprus Union of Shipowners.
The shipping taxation system has ensured the viability of the Cyprus Shipping Register and the Cyprus shipping industry. Welcoming the decision, the Cyprus Shipping Chamber said the industry can continue its successful course and help the island maintain its prominent position in International shipping and develop it even further.
The European Commission adopted five separate decisions, concerning:
• introduction of a tonnage tax and seafarer scheme in Estonia
• prolongation of a tonnage tax and seafarer scheme in Cyprus
• introduction of a new seafarer scheme in Poland,
• prolongation and extension of a seafarer scheme in Denmark, and
• prolongation of a seafarer scheme in Sweden.
As regards the tonnage tax schemes in Estonia and Cyprus, the EC found the schemes comply with the rules limiting tonnage taxation to eligible activities and vessels. Furthermore, as regards taxation of dividends of shareholders, the EC found both the Cyprus and Estonian tonnage tax schemes ensure shareholders in shipping companies are treated in the same way as shareholders in any other sector.
In relation to the seafarer schemes in the five countries, the EC found all five states have agreed to apply the benefits of their respective scheme to all vessels flying the flag of any EU or EEA [European Economic Area] state.
The EC concluded the schemes are in line with EU State aid rules, as they will contribute to the competitiveness of the EU maritime transport sector and encourage ship registration in Europe, while at the same time preserving Europe’s high social, environmental and safety standards and ensuring a level playing field.
Natasa Pilides, Cyprus Shipping deputy minister, said: “To be recognised by the European Commission for our fair and transparent tonnage tax system, which has already been applicable for 10 years and is now extended for another 10 years, demonstrates our commitment to the sustainable growth of European shipping and enables us to continue with our strategy for the sustainable growth of the sector in Cyprus and in Europe.”
The Cyprus flag averages seven years of age, encompassing over 1,000 oceangoing vessels of over 24m gt. Pilides said “both the number of ships registered under the Cyprus flag and the number of companies under the Cyprus tonnage tax system is growing steadily, and we are committed to continuing this trend”.
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