The Merchant Shipping Legislation enacted as from 1 January 2010 has placed Cyprus in the forefront. Cyprus has become the only EU country with an EU approved Tonnage Tax system that:
- Provides for Tonnage Tax on the net tonnage of the vessels rather than Corporation Tax on the actual profits, regulated by the Department of Merchant Shipping rather than the Tax Authorities.
- Grants total tax exemption of profits tax and distribution tax at all levels.
- Allows mixed activities within a company/group (shipping subject to Tonnage Tax and other subject to 10% corporation tax).
- supports an open registry.
- Allows split ship management activities (crewing or technical).
- In addition, the favorable income tax legislation compliments the excellent Merchant Shipping Legislation, creating a highly tax efficient harbor for shipping groups and an ideal holding company location.
The tax system is in full compliance with EU requirements and also within the Organization for Economic Co-operation and Development (OECD) requirements against harmful tax practices. In a nutshell, the tax system provides to the investors:
- Only 10% corporation tax – the lowest in the EU.
- Exemption from tax of dividend income (subject to easily met conditions).
- Exemption from tax of profits from foreign permanent establishments (PE).
- Exemption from tax of profits generated from transactions in titles.
- Exemption from withholding tax on the repatriation of income either in the form of dividends, interest and on almost all royalties.
- Extensive double treaties network.
- Access to EU Directives.
- No controlled foreign corporation (CFC) legislation.
- No thin capitalization rules (funding by high debt/equity ratio possible).
- Tax neutral reorganizations for both EU and non EU group companies.
Cyprus plays a prominent role as a leading Shipping and ship-management center and will continue to strengthen its position in the world economy by maintaining and enhancing its sound maritime infrastructure, favorable tax regime and competitive ship registration and annual tonnage tax rates.
The tax incentives combined with the economic and the other advantages provided, including the excellent infrastructure, make Cyprus the ideal choice for shipowners, charterers and ship-managers.
Our services include:
• Tax planning, structuring and restructuring.
• Registration of shipping companies (ship owning, charterers or ship management).
• Registration of holding and finance companies.
• Ship registrations, deletions, transfers and mortgages.
• Maintenance and full compliance services of Cyprus registered companies.
• IFRS accounting and technical advise.
• Floatation of shipping groups.
• Payroll services and accounting outsourcing.
• Business advisory services (corporate finance, valuations, mergers & acquisitions).
• Fiduciary services.
In addition to the above services in Cyprus, we provide ship registration services in various offshore jurisdictions. It includes the establishment of legal entities in all countries having flag of convenience, registration of ship’s nationality and establishment of mortgages.
Countries for ship registration:
• Marshal islands