US Treasury Issues Guidance On Shipping Tax
The US Treasury Department and the Internal Revenue Service (IRS) on Thursday
issued guidance on the procedure for making an election to determine corporate
tax on income from certain international shipping activities under the new tonnage
tax regime. The tonnage tax regime created by the American Jobs Creation Act of 2004 allows
a corporation that is a qualifying vessel operator to elect to be subject to
tax on notional income from qualifying shipping activities, rather than on actual
income from such activities. However, an election is only effective if it is made by a corporation that
satisfies the specified requirements for eligibility to make the election. According to the Treasury guidance, the election is available for taxable years
beginning after October 22, 2004, and is effective for the taxable year for
which it is made, and for all succeeding taxable years until terminated. .
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