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Norwegian Shipping Tax Changes Not State Aid: EFTA

by Ulrika Lomas, Tax-News.com, Brussels

02 December 2014


The European Free Trade Association Surveillance Authority (EFTA Surv) has approved certain amendments to the Norwegian Special Tax System for Shipping (STSS), after considering them in relation to the state aid rules of the European Economic Area (EEA) agreement.

Under the STSS, shipping income is exempted from corporate tax, and only a tonnage tax related to the ship's tonnage is imposed. The tax reduction is intended to give an incentive for shipping companies to improve the environmental standards of their ships. Depending on an environmental rating of the ship, the standard tonnage tax may be reduced by between 2.5 percent and 25 percent.

A ship's environmental rating is based on its air emissions, operational discharge from the ship into the sea, and its efforts to prevent accidental discharge into the sea.

The amendments, now approved by EFTA Surv, among other things, add CO2 emissions to those air pollutants measured (currently COx and NOx) to assess a ship's air emissions, and add a new criterion on the shipping company's implementation of an environmental accounting system for ships.

EFTA Surv found that the differentiated reduction of the standard tonnage tax within the STSS, based on the revised environmental criteria, remains compatible with the state aid rules of the EEA Agreement.

TAGS: environment | tonnage tax | tax | marine | accounting | corporation tax | Norway | agreements | tax breaks | standards | Europe | Tax

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