European Union has agreed to extend Cyprus’ tonnage tax regime for 10 more years. Furthermore, Cyprus is aiming to scrap ship registration fees. Deputy Shipping Minister of Cyprus Natasa Pilides’ team has been in extensive discussions with European Commission regarding Cyprus’ tonnage tax regime. According to Deputy Shipping Minister of Cyprus Natasa Pilides, this extension demonstrates Cyprus’ commitment to the sustainable growth of European shipping and shipping sector will grow in Cyprus and in Europe. Cyprus has a fair and transparent tonnage tax system. 10 more years extension of Cyprus’ tonnage tax regime will increase registered tonnage in Cyprus. Cypriot-flagged ships has been growing steadily. Cyprus ship register has more than 1,000 ships of more than 24 million GT (Gross Tons). According to European Commission, European Union wants to encourage ship registration in Europe and contribute to the global competitiveness of shipping sector without unduly distorting competition.
Denmark, Sweden, Estonia, Poland and Cyprus have also had seafarer schemes either prolonged or introduced. Seafarer schemes allow labor costs such as income tax and social security contributions to be partly or totally reduced on ships flying the flag of any European Union or European Economic Area member state. Furthermore, European Union has granted permission to Estonia to introduce a tonnage tax scheme. Estonia tonnage tax regime will allow shipping companies to pay tax based on a notional profit or the amount of tonnage a shipping company operates, instead of being subject to the normal corporate tax system. Estonia tonnage tax regime will apply to ship-ownership, ship-management and chartering activities.