Tax Calculator Cyprus

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					      “The New Cyprus Tonnage Tax System”

Andreas Chrysostomou
Head of Maritime Policy and Standards Division
Department of Merchant Shipping
Significance of New Tonnage Tax System (TTS)
□ Enhances competitiveness of ship owners,
charterers and ship managers.
□ Encourages the employment of European personnel.
□ Maintains shipping know-how.
□The EC recognises that shipping activities in Cyprus
ensure the implementation of Community Acquis on
maritime safety on vessels irrespective of flag.
Importance for Cyprus Shipping
□ Simplified tonnage tax system approved by EC as
compatible with the requirements of the EU acquis.
□ Cyprus is the only open EU Registry achieving the
approval of such a tax system and thus a competitive
□ It secures a stable fiscal environment for Cyprus
The tonnage tax system is available to:

      □ Ship owners
      □ Charterers
      □ Ship managers

who own, charter or manage qualifying ships engaged
in qualifying shipping activities.
Those who participate in the TTS are exempted from income tax
and pay tonnage tax, calculated on the basis of the net tonnage of
the ship.
Qualifying ship
A qualifying ship is any seagoing vessel certified under
applicable international or national rules and regulations
and registered in the ship register of any member of the
International Maritime Organization and the International
Labour Organization, which is also recognised by Cyprus.

The regime specifically excludes fishing vessels, ships
used primarily for sports or recreation, river vessels, non-
self propelled floating cranes, non-ocean going tug boats,
floating hotels, restaurants and casinos.
Qualifying shipping activity
Any commercial activity that constitutes maritime transport,
crew management and/or technical management.
The definition of maritime transport includes:
□ the traditional carriage of goods and passengers between
ports and/or offshore facilities,
□ towage, dredging and cable-laying activities.
□ ancillary activities, such as:
   o hotel, catering, entertainment and retailing activities on board of a
   qualifying ship,
   o the provision of loading and unloading of cargo within a port area.
Income tax exemptions
Total exemption from income tax on:
□ Income from the operation of a qualifying ship engaged in a qualifying
shipping activity or from rendering crewing and/or technical
management services to a qualifying ship,
□ Dividends paid directly or indirectly out of such income,
□ Interest earned on working capital or from the financing, operation
and maintenance of a ship or for the payment of expenses arising out
of the charter party or for the payment of expenses relating to the
management of a ship,
□ Income from the sale of a qualifying ship.
□ Salaries and other benefits of seafarers of a qualifying Cyprus ship
engaged in a qualifying shipping activity.
Participation in the TTS
□ Ship owners of Cyprus ships by default are within
the scope of the TTS.
□ Ship owners of foreign ships, Charterers and
Ship managers have the option to be taxed under the
TTS or under income tax (10%). Those opting for the
TTS must remain in the system for 10 years. Early
withdrawal will result in penalties.
General Requirements
□ Tax resident in Cyprus.

□ Option “All or Nothing”: all qualifying ships and all
qualifying companies belonging to a group must enter
the TTS.

□ A share of the fleet must comprise EU flag ships.
This share must not be reduced in the three-year
period following the entrance to the TTS.
General Requirements
□ All non-community ships must comply with relevant
international standards and fulfil Community law
requirements relating to maritime security, safety,
training and certification of seafarers, environmental
performance and on-board working conditions.
Specific Requirements for Charterers
The tonnage of the ships under time or voyage
charters should not exceed 75% of the total tonnage of
ships chartered and owned, for more than three
consecutive years. This eligibility percentage increases
to 90% if the ships chartered are EU/EEA ships or their
crew and technical management are carried out
entirely from the EU/EEA.
Specific Requirements for Ship managers
□ Employment of sufficient in number and qualifications
personnel (51% of whom must be EU/EEA citizens):
                                          Skilled   Qualified
                    Ships    Employees     Crew      Marine
                                         Managers   Engineers
       Crewing &    1-10        3           1          1
       Technical   Over 10      7           1          2
                    1-10        4           1         N/A
                   Over 10      8           2         N/A
                    1-10        4          N/A         1
                   Over 10      8          N/A         2
Specific Requirements for Ship managers
□ The full management of at least 2/3 of the total
tonnage under their crew or technical management, is
carried out from the territory of the EU/EEA.
□ Full implementation of the provisions of the Maritime
Labour Convention 2006 by crew managers.
□ Ship managers who perform technical
management services must be certified under the ISM
Further information
Visit the DMS website at for:

□ The full text of the Law in Greek.
□ Unofficial translation of the Law in
□ An overview of the new TTS, available in
Greek, English, German and Russian.
□ Tonnage tax calculator.

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