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Maltese tonnage tax scheme approved by the European Commission

Illegal state aid procedures suspended after Malta tonnage tax scheme approved for 10 years

matthew_vella
Matthew Vella
19 December 2017, 2:00pm
The European Commission has conditionally approved the Maltese tonnage tax scheme for another 10 years under EU state aid rules.

The scheme lays down a level-playing field between shipping companies in Malta and those in wider Europe, while further encouraging ship registration.

“Today we have a solution for a very successful future,” transport minister Ian Borg said at news of the resolution of the EU infringement procedure.

Malta had been discussing this scheme and other tax measures with the Commission since October 2011. On 26 July 2012, the European Commission decided to initiate a procedure over possible illegal aid measures applied by Malta in favour of shipping companies and their shareholders.

“The discussions have been difficult and technical, and they stretched out over a number of years, proportionately to the sensitivity of this sector and its importance to our country, a sector which employs many people, both directly and indirectly,” Borg said.

The tonnage tax scheme comes with specifications on eligible vessels, specific types of income and activities of tonnage tax ships subject to tonnage tax and the tonnage tax scheme, including the extension of the tonnage tax to non-core shipping activities, the level of tonnage tax, the flag link requirement, and ring-fencing measures. 

“Today marks an important milestone in Malta’s flourishing shipping sector, as it is the day in which the European Commission has conditionally approved under EU State aid rules the Maltese tonnage tax scheme for a period of 10 years,” Borg said.

Malta now has one of the first tonnage tax schemes to be approved by the Commission.

matthew_vella
Matthew Vella is executive editor at MaltaToday.
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