Korea Seeks To Be Number 5 Shipping Power By 2010

by Mary Swire, Tax-News.com, Hong Kong

22 May 2008

The Korean authorities hope to raise the country to become the fifth-biggest global shipping power by 2010, it emerged on Thursday.

According to a report from the official Korea Information Service (KOIS), the Ministry of Land, Transport and Maritime Affairs revealed this week that last year, Korea ranked sixth in this area, with 36.80 million deadweight tons (DWT) of registered ships.

KOIS quoted an unnamed government official as announcing that:

"As of May, local shipping companies have ordered 22.00 million DWTs of ships that will be delivered in the coming years, which should be sufficient to push up Korea's overall ranking by at least one notch."

In order to bolster South Korea's standing in this area, the government introduced a regime in 2004-05 under which local shipping companies were permitted to pay tonnage taxes instead of corporate income taxes, which helped cut the tax burden for the sector, thereby boosting operations.

KOIS further revealed that firms have also made use of special shipping funds to purchase vessels in recent years. Investment in such funds affords participants tax breaks, making the situation mutually beneficial for both the companies taking advantage of the funds, and the investors involved.

According to the report, the Ministry is now seeking to assist shipping companies expand in business areas that are vital for sustained growth, for example taking over foreign terminals and logistics companies.

Recommended