Cypriot Tonnage Tax scheme re-approved by EU Commission for 10-year period as of 1 January 2020 – Courtesy of EY

On 16 December 2019 the European Commission has approved under EU State aid rules, amongst others, the prolongation of a tonnage tax and seafarer scheme in Cyprus.

The Commission assessed the Cyprus tonnage tax scheme under EU State aid rules, in particular its Guidelines on State aid to maritime transport (the “Maritime Guidelines”) and established that it is in line with its interpretation of the Maritime Guidelines. In its application of the Maritime Guidelines, the Commission is determined to ensure consistency and equal treatment of shipping companies throughout the EU whilst at the same time making sure that any beneficial tonnage tax and seafarer schemes do not contravene internal market rules. The Commission ensures in particular that there is no spill-over of the favorable tax treatment of shipping companies into other sectors unrelated to maritime transport, that there is no discrimination against other EU or EEA State registries and that the aid does not exceed the ceiling set out in the Maritime Guidelines.

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