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EC Scrutinises Proposed Danish Tonnage Tax Amendments

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

25 January 2007


The European Commission on Wednesday opened an investigation concerning a proposal by Denmark to amend its flat-rate tonnage-based tax scheme (tonnage tax) for shipping companies.

The Danish authorities intend no longer to require companies benefiting from this tax scheme to send the authorities financial information relating to their transactions with their foreign subsidiaries.

Denmark wants the Commission to approve this change to the current scheme. The notified measure should not normally alter either the level of aid that Danish shipping companies receive or the budgetary impact of the scheme for the Danish State.

However, the Commission took the view that the change could negate one of the control measures linked to the scheme, namely the monitoring of commercial transactions between companies subject to this scheme and their subsidiaries.

The abuse-prevention measures required by the Commission for all the tonnage tax schemes within the Community are essential to ensure that these favourable taxation measures are not extended to activities other than maritime transport.

The Commission has therefore decided to open a formal investigation procedure concerning the measure notified by Denmark with a view to obtaining the opinion of any interested third party, in particular the tax authorities in the other Member States.


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