EC Authorizes Amendment To Irish Tonnage Tax Regime

by Ulrika Lomas, Tax-News.com, Brussels

02 March 2009

The European Commission has decided to authorise an amendment of the Irish tonnage tax related to time charter rules on the basis that it will contribute to the development of maritime policy in the European Community.

In 2007 the Irish authorities notified their intention to modify the 'time charter' rules under the country's tonnage tax scheme, which the Commission has permitted to run until 2012. A time chartered ship is chartered with crew for a short period of time. The 2002 tonnage tax allowed for a ratio of 1-owned to 3-time chartered ships.

Following Commission approval on February 25, for every owned vessel a company may have 10-time chartered vessels that will be allowed to benefit from the Irish tonnage tax provided that every time-chartered ship is either: registered in a Community or European Economic Area (EEA) maritime register; or its crew management and its technical management are carried out on the territory of the Community or the EEA.

According to the EC, this change of the time charter ceiling can contribute to the Community's interests in the field of maritime policy.

The approved amendment may be applied as from January 1, 2007.

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