Marine Link
Thursday, October 19, 2017

Tonnage Tax

Moore Stephens to Make Representation on Tonnage Tax Changes

Sue Bill

International accountant and shipping consultant Moore Stephens is to make representation to Her Majesty’s Revenue & Customs in connection with recently issued draft revised guidance in respect of the U.K. tonnage tax regime, some of which it considers to be unhelpful.  Moore Stephens tax partner Sue Bill said, “None of the changes are fundamental. Indeed, some of them are helpful, for example the revised comments regarding the circumstances in which a tonnage tax company is regarded as only temporarily having ceased its activities and therefore eligible to be within the regime when it resumes activities. Such changes show that HMRC is prepared to be more flexible in certain circumstances. “There are, however, a couple of areas where the update is unhelpful. For example, HMRC has said that it does not regard the recent decision in Euroceanica (U.K.) Limited v HMRC (2013) UKFTT 313 as binding. In Euroceanica, the First Tier Tribunal, which hears appeals against HMRC decisions relating to tax, held that interest received on a security deposit which was required in order to take out bank loans to acquire ships in the tonnage tax regime was within the tonnage tax ring-fence, and that therefore no further tax was payable. However, HMRC has now said that, as a general principle, it does not accept that interest arising on such security deposits is within tonnage tax

Greece's Creditor Propose to Target Shipping Sector

Greece's shipping sector faces paying a higher tonnage tax, and a phase-out of the special tax allowances it has enjoyed, under the latest proposals presented by the country's creditors, according to documents seen by Reuters. Together with tourism, the shipping sector is a vital generator of income for Greece. According to an official document indicating steps Greece must take, its lenders say the country must "increase the rate of the tonnage tax and phase out special tax

Moore Stephens: HMRC May Rethink Tonnage Tax Changes

Sue Bill, Moore Stephens

Moore Stephens, understands that Her Majesty’s Revenue & Customs (HMRC) has agreed to re-examine, in consultation with the shipping industry, its earlier intention to unilaterally reinterpret the UK Tonnage Tax rules to the potential detriment of many shipowners. Widely disputed changes based on unspecified ‘legal advice’ were set out in HMRC’s tonnage tax manual in September 2009. These focused in particular on a reinterpretation of the strategic and commercial

Rising Profit Tide for Horizon

AP reported that Horizon Lines Inc. said its third-quarter profit rose, aided by a large tax benefit. For the quarter ended Sept. 24, the company reported net income of $52.9 million, or $1.57 per share, versus prior-year profit of $2.8 million, or 14 cents per share. Revenue rose to $304.7 million from $289.1 million in the year earlier period. Horizon elected to pay an alternative tonnage tax instead of federal corporate income tax on qualifying shipping activities

Moore Stephens Rues Missed Opportunity

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International accountant and shipping consultant Moore Stephens says it is regrettable that changes announced for inclusion in the UK Finance Bill 2013 have failed to remove exchange rate distortions from the calculation of capital gains on ships.   Currently, all capital gains and losses subject to UK corporation tax are calculated by reference to sterling, with the result that capital gains and losses arising on non-sterling assets, including certain ships

EC Warns Greece on Tonnage Tax

Logo: European Commission

 The European Commission has sent to Greece a set of proposals to ensure that state support to the maritime sector in Greece complies with EU state aid rules.   In particular, the Commission found that current provisions may breach EU state aid rules by allowing shareholders of shipping companies to benefit from favourable tax treatment that should be reserved for maritime transport providers.   Similarly

Liberian Registry Launches Green Ship Initiative

Scott Bergeron (Photo courtesy: Liberian Registry)

“We have launched a new initiative to help shipowners improve their green credentials and meet other corporate social responsibilities," said Scott Bergeron, CEO of the Liberian International Ship & Corporate Registry (LISCR), the U.S.-based manager of the registry. "Our aim is to ensure that Liberia remains the greenest fleet afloat." He continued, “The Liberian administration welcomes any new technology and ship designs which improve operational efficiency

Horizon Lines Reports 2Q Results

Horizon Lines, Inc. reported solid earnings for the second quarter of 2007. Net income for the second quarter of 2007 was $9.6m or $.28 per diluted share compared to net income of $6.4m or $.19 per diluted share for the second quarter of 2006. After adjustment to exclude the non-recurring loss on extinguishment of debt in 2007 and secondary offering expenses in 2006, and to retroactively apply tonnage tax to 2006, adjusted net income was $10.0 million or $

Moore Stephens: UK 2016 Budget to Impact Shipping, Offshore Sectors

Moore Stephens tax partner Gill Smith.

UK Budget 2016 provides surprises for shipping and radical measures for offshore maritime sector. Leading accountant and shipping adviser Moore Stephens says the UK Budget 2016 contains a number of surprise developments which are likely to be of interest to the shipping sector, as well as a radical set of measures which it is hoped will assist the offshore maritime oil and gas sector.    The Government announced a further reduction in the rate of corporation tax

UK Shipping Industry Takes its Cause to Government

[L-R:] Ben Murray,  manager of Maritime UK; Guy Platten, CEO of the UK Chamber of Shipping and Clemence Cheng, CEO of HPH UK, walk up to Downing Street with Lance Bachelor, CEO of Saga plc; and Dr Grahaeme Henderson, president of the UK Chamber of Shipping and VP of Shipping & Maritime at Shell. Photo: UK Chamber of Shipping

 The UK Chamber of Shipping's CEO Guy Platten and its president Dr Grahaeme Henderson were among a delegation of international shipowners and major figures from the shipping industry that visited 10 Downing Street on Monday as part of London International Shipping Week 2017.   The delegation, led by Maritime UK, took part in a round-table debate with government ministers to discuss both the challenges and opportunities facing the UK's maritime industry

Cadets Stranded on Hanjin Ship Head Home

Hanjin Louisiana (Photo: Nautilus)

The Hanjin Louisiana, one of the containerships caught up in the collapse of the South Korean shipping company Hanjin, has finally docked in Singapore after several weeks of uncertainty at sea.   Among those onboard the containership were four Scottish cadets, who disembarked in Singapore on September 28 for flights back home to the U.K., BBC reports.   The four trainee officers studying at the City of Glasgow College – Ruaridh Hanna, David Gorniak

Post-Brexit: UK Chamber Calls for ‘Free Trade Commission’

Courtesy UK Chamber of Shipping

UK Chamber of Shipping statement on the outcome of the EU Referendum The UK Chamber of Shipping remained neutral on the question of the UK’s membership of the EU but we recognise the decision of the British people. The chamber has always argued that the shipping industry is resilient by its nature.  Shipping moves 95% of the UK’s international trade and we don’t see that changing. We may now be beginning the process of leaving the European Union

Liberian Registry to Recognize Green Award Ships

Photo: LISCR

Liberia has become the first flag state to participate in the Green Award program, under which eligible shipowners will be offered significant annual tonnage tax discounts.   Scott Bergeron, CEO of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “This initiative provides further confirmation of the pioneering role adopted by Liberia in all areas of global shipping

Ship Retrofit to Cut Fuel Use by 25%

Liberian flagged  vessels are eligible for a 50 percent tonnage tax discount for the first year after retrofit. Photo CWR

Carbon War Room (CWR) announced today that a collaboration between Hammonia Reederei, a Hamburg-based shipowner, and New Orleans-based charterer Intermarine, has enabled the retrofit of three sister vessels with multiple efficiency technologies. Under expected operating conditions, each vessel is anticipated to see 25 percent fuel savings, to be shared between Hammonia and Intermarine. José María Figueres, Chairman of the Board

Greek Shipers Disagree with EC on Tax Issues

The European Commission recently published Decision (C(2015)9019 final / 18-12-2015) alleging that some provisions of the Greek shipping taxation regime are in breach of EU state aid provisions and, in particular, the conditions set out in the current Community Guidelines on State Aid to Maritime Transport (SAG).   In response, the Union of Greek Shipowners issued a statement expressing its disagreement with the decision.  

Singapore Recognises 53 Ships Under Green Ship Programme

Image by Government of Singapore.

 The Maritime and Port Authority of Singapore (MPA) today recognised another 53 Green Ships from 41 companies that have qualified for the Green Ship Programme (GSP) at the Third Singapore Registry of Ships Forum (SRS Forum).   The GSP encourages Singapore-flagged ships to reduce carbon dioxide and sulphur oxides emissions. Qualifying Singapore-flagged ships can enjoy a reduction of Initial Registration Fees and a rebate on Annual Tonnage Tax

Nordic Tankers joins forces with Borealis Maritime

NordicMarianne. Photo: Nordic Tankers A/S

 Nordic Tankers and Borealis Maritime Ltd has announced the intention to form a jointly held company, Crystal Nordic A/S – a strong player in the short-sea, ice class chemical tanker trade in the Baltic and North-Western European market.   Crystal Nordic A/S will be owned on a 50/50 basis by Nordic Tankers and Embarcadero Maritime (Borealis Maritime). The new company will take over the respective ice classed stainless chemical tankers businesses from its owners

Greek Shipping Frets Over Higher Taxes

Image: Greek Liberties Monitor

 Greece's cash-strapped government is proposing to end increase taxes m the country's key shipping sector in order to boost revenues, but some shipping owners are threatening to move their ships abroad as a result, says a report in BBC.   The Greek shipping fleet has since become the biggest in the world, with almost 4,000 ships representing 19% of global shipping capacity. It contributes more than 7% towards the struggling economy, but the country's creditors say it can do more.

Sweden Proposes Tonnage Tax

Swedish Port Pic by  Sjofartsverket

  The Swedish government has proposed a Swedish tonnage tax system. The aim is for Swedish shipping companies to compete under equal conditions with companies in other countries in Europe. At Donsö Shipping Meet 2015, the Minister for Infrastructure Anna Johansson presented the government's maritime strategy. At the same time, she revealed that a Swedish tonnage tax will be introduced in summer 2016. Tonnage tax means that Swedish shipping companies will operate under competitive

Greece's Creditors Take Aim at Shipowners

Greek ports. Image: Polish Embassy in Athens

 Greece's international lenders are asking the debt-laden country to hike vessel tax, according to a report in the Financial Times. The shipping sector is a vital generator of income for Greece.   According to an official document indicating steps Greece must take, its lenders say the country must "increase the rate of the tonnage tax and phase out special tax treatments of the shipping industry".  

Greek Fleet (Still) Rules

Maran Gas Asclepius

Since ancient times, maritime trade has been a backbone of Greece’s economy with shipping playing the dominant role. Today, it is the second largest contributor to the national economy after tourism. It is the country’s geography with a coastline almost that of the U.S. (including Alaska) in length together with the mountainous nature of the landmass with 85% of Greek population living within 30 miles of the sea

UK flag fleet Size Declines

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  According to UK's Department of Transport (DFT) the UK fleet size fell in 2014 from 16th place to 20th place, in terms of deadweight tonnage, decreasing by 17 per cent. Ships registered in the Crown Dependencies (primarily the Isle of Man) remained at 12th place despite tonnage decreasing by 4% over the same period. The deadweight tonnage of the UK-registered trading fleet has decreased by 27% since 2009, while the combined deadweight tonnage of the world trading fleet has increased

Support to Cyprus Shipping Industry

Nicos Anastasiades (Picture by Presidency of the Republic of Cyprus)

Cyprus President  Nicos Anastasiades reiterated his Government’s strong support towards the shipping industry and determination to introduce those mechanisms necessary to further enhance it.  The Ministry of Communications and Works and the Department of Merchant Shipping, with the active involvement and support of the Shipping Chamber, CIPA and other related bodies, commissioned a "Strategy Study on Cyprus Shipping”

Shippers Must Monitor Greek Government Changes

Michael Kotsapas (photo: Moore Stephens)

Moore Stephens says shipping must monitor developments in wake of Greek government change   International accountant and shipping adviser Moore Stephens says it is too soon to say whether the Syriza party’s victory in the country’s elections could, as some fear, have a damaging effect on the country’s shipping industry. Rather, it says, Greek shipping interests will need to monitor how the change of government might affect them on both a business and personal level

Greek Shipping Fears Syriza Tax Plan

Image: Hellenic Shortsea Shipowners Association

Will the new government in Greece led by radical-left party Syriza levy higher taxes that the shipping industry can’t afford? A report in WSJ says that several owners in Greece’s important shipping sector are worried about this.  Some owners say they plan to limit their operations in Greece or move out of the country altogether, if the industry is unable to reach a compromise with the government.  

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