Prolongation of a Tonnage Tax and Seafarer Scheme in Cyprus

The European Commission on 16 December 2019 approved under EU State aid rules, five schemes to support maritime transport, including the prolongation of the Tonnage Tax and Seafarer Scheme of Cyprus. The scheme encourages ship registration in Europe and contributes to the global competitiveness of the sector without unduly distorting competition.

The Commission assessed the scheme under EU State aid rules, in particular its Guidelines on State aid to maritime transport (the “Guidelines”) and established that the scheme is in line with its interpretation of the Guidelines. One of the measures of the Guidelines is tonnage tax, whereby shipping companies can apply to be taxed based on a notional profit or the tonnage they operate, instead of being taxed under the normal corporate tax system.

As regards the tonnage tax scheme of Cyprus, the Commission found that the scheme complies with the rules limiting tonnage taxation to eligible activities and vessels.

The non-confidential version of the decision will be published under the case number SA.51809 for Cyprus.