Advert

EC probe into Malta’s tonnage tax scheme

Malta allegedly grants private yachts the same tax reductions as freight and passenger vessels. Photo: Darrin Zammit Lupi

Malta allegedly grants private yachts the same tax reductions as freight and passenger vessels. Photo: Darrin Zammit Lupi

The European Commission has opened an in-depth investigation into Malta’s tonnage tax scheme to see whether it fits in with EU state aid rules, given that it is also made available to fishing boats and yachts.

The Commission fears the favourable tax treatment intended for transporting passengers and freight at sea is being extended to beneficiaries that should not be entitled to the same assistance under state aid rules.

An in-depth inquiry allowed interested parties to comment on the measures but did not prejudge the outcome of the investigation, the Commission said.

Vice-president Joaquin Almunia stressed the importance of giving shipping firms favourable tax treatment because of the high exposure to competition from non-EU countries.

However, Mr Almunia questioned the way the scheme has been practised in Malta.

“In the Maltese case, the support measures apply to yachts, bankers and ship lessors, among other beneficiaries.

“This seems neither justified from a competition perspective nor appropriate in times of high budgetary constraints.”

The Commission’s guidelines on state aid to maritime transport allow member states to cut taxes for the maritime transport of passengers or freight under certain conditions.

However, Brussels says the scope of the Maltese scheme seems too wide and includes fishing vessels, yachts, oil rigs and ship owners without any shipping activity of their own.

Given the number of exemptions and reductions available, it appeared that, in a number of cases, the level of tax burden for a iven tonnage was lower in Malta than in other member states.

This could make the Maltese tonnage tax system more attractive than the ones applied in the rest of the EU.

Moreover, no sufficient safeguards were established to ensure that benefits available under the tonnage tax did not spill over to non-shipping activities of the beneficiaries.

The Commission said it, therefore, had concerns that the Maltese scheme could lead to distortions of competition in the EU internal market by potentially attracting companies and vessels from other member states.

“The Commission will now investigate in depth to find out whether these concerns are confirmed or not.”

Advert

Comments are submitted under the express understanding and condition that the editor may, and is authorised to, disclose any/all of the above personal information to any person or entity requesting the information for the purposes of legal action on grounds that such person or entity is aggrieved by any comment so submitted.

At this time your comment will not be displayed immediately upon posting. Please allow some time for your comment to be moderated before it is displayed.

For more details please see our Comments Policy

Comments not loading? We recommend using Google Chrome or Mozilla Firefox with javascript turned on.
Comments powered by Disqus
Advert
Advert