Cyprus Tax Tonnage System
The ship management sector in Cyprus manage in 2015 to raise revenues over 450 million Euros something that demonstrates its strength. The Cyprus sectors corresponds approximately to 6% of Cyprus GDP.
The advantage or registering a ship management company in Cyprus include: simplicity of the process, the geographic location of Cyprus, the island offers worldwide first class services and of course the Cyprus Tonnage Tax system which makes Cyprus an attractive location for ship management companies
Under the Cyprus Tax tonnage system the annual tax calculated is based on the net tonnage of the qualifying vessels managed by the ship manager. Cyprus Tax tonnage system is the only one the European Union that is approved, that’s why 20& of the world’s ship management companies are registered and operate in Cyprus. Year by year registration of ship management companies under the tonnage system increase with around 40 companies to be under the system in 2015.
Criteria for registration
Any ship manager who is a tax resident of Cyprus and provides crewing or technical services to a qualifying ship which operates in qualifying activities can choose to be taxed under the Tonnage system if the following criteria are satisfied.
- Fully operational office in Cyprus
- Employment of a satisfying number of personnel who 51% of those are EU citizens.
- Approximately 66% of the management to be carried from EU territory
- Compliance with international standards (maritime security, safety etc.)
- If the ship management companies registers with the tonnage system it must operate through that system for at least 10 years and if it opts to leave the system it needs to pay the difference between amount paid and the amount that was going to pay if the company was not registered under the tonnage system.
|UNITS OF NET TONNAGE||€TT PER 400 UNITS|
For more information and guidance get in touch with our lawyers or email iMPK Global Business Law Firm – Cyprus Lawyers – Michalaki, Pitsillidou & Co. LLC, at firstname.lastname@example.org .Tel. +357 99345000 – Fax +357 25 660097.