Taxes can be a major burden in the chartering business.
With the introduction of the Tonnage Tax System in 2010, the Cyprus Ship Registry noted an increase of 300% in the number of Chartering companies registered under the Tonnage Tax system in a span of 4 years.
The reasons for such tremendous increase are obvious:
- Great Financial Incentives: as the Companies are solely taxed on the tonnage of their fleet and not on their profits;
- The clarity and simplicity of the law as well as the efficiency of the Department of Merchant Shipping ensure that almost all applications are examined within one month and
the overall application and examination procedure is very clear without any element of surprise or unpredictability;
- The system applies to mixed fleet situations (not solely to Cypriot fleet or EU fleet);