6th Mar 2020
Senior associate Tassos Stylianou from our firm’s Shipping and Maritime Law team attended the Deputy Shipping Ministry’s Annual Review, where the successful prolongation of the Cyprus Tonnage Tax regime for a further ten years was announced by the Deputy Shipping Minister.
The prolongation of Cyprus’ tonnage tax scheme applies to ship ownership, ship management and ship chartering activities. Cyprus was the first ever open registry to have a Tonnage Tax System (TTS) approved by the EU and the system’s prolongation provides stability and certainty for current and future shipping companies flagged with the Cyprus Shipping Deputy Ministry and/ or operating in Cyprus.
The Cyprus tonnage tax measure is a tax system whereby beneficiary companies can choose to be taxed on the basis of their net tonnage (tonnage tax) rather than on their actual profits from maritime transport activities. The tonnage tax is considered one of the key assets of the Cypriot shipping industry in efforts to attract more ships and companies to the Cyprus maritime cluster.
The prolongation of the system is expected to encourage ship registration in Europe, as well as the presence and growth of shipping companies and maritime operations in the EU. The system contributes to the competitiveness of the EU maritime transport sector while supporting Europe’s high environmental and safety standards.