New Slovenian Tonnage Tax Scheme Approved

by Ulrika Lomas, for LawAndTax-News.com, Brussels

14 January 2009

It has been announced that the European Commission approved on January 14 the introduction of a tonnage tax system in Slovenia.

The new system means that entities which are tax liable in Slovenia and engaged in international transportation by ship or in a related activity now have the possibility to change the base for their taxable profits.

The Commission's decision allows the Slovenian authorities to apply the scheme retroactively from January 1, 2008 for a period of ten years.

Companies fulfilling certain criteria may opt for a lump sum taxable base calculated on the net tonnage of their fleet, for the taxation of their profits derived from international maritime traffic, instead of the normally applicable corporate income tax.

Ship-owners will therefore pay a lower tax rate for their vessels, which must be registered in Slovenia or in any other EU/EEA member state.

This measure intends to stimulate the Slovenian shipping sector. The Commission considers that this scheme complies with the 2004 Community Guidelines for state aid to maritime transport.

The approval took place in the context of the Commission's maritime policy which aims, among other objectives, at maintaining the Community fleet and preserving the employment of EU maritime related staff both on-board and onshore. It is hoped that by so doing, this will decrease the flagging-out of the EU maritime fleet, thereby retaining employment and maritime know-how within the European Union.

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