The Maltese tonnage tax scheme has been conditionally approved for 10 years under EU state aid rules by the European Commission, Infrastructure Minister Ian Borg said.

He said the scheme laid down a level playing field between shipping companies in Malta and in Europe, while further encouraging ship registration, which would in turn continue to bolster Malta’s thriving registry.

“Today we have a solution for a very successful future”, Dr Borg said.

Malta had been discussing this scheme and other tax measures with the Commission since October 2011.

On July 26, 2012, the European Commission informed Malta that it had decided to initiate the procedure on possible illegal aid measures applied by Malta in favour of shipping companies and their shareholders.

The discussions were difficult and technical, and they stretched out over a number of years, proportionately to the sensitivity of the sector and its importance to the country, a sector which employedmany people, both directly and indirectly.

The current government, Dr Borg said, inherited this problem in 2013, but remained focused and committed to ensure that a fair deal would be attained in the interest of those operating under the Maltese flag, the Maltese economy, and the wider European shipping industry.

The decision came with several legal and economic benefits, the minister said adding that the tonnage tax scheme came 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.

Minister Borg spoke of the hard work and negotiations over the past years, and stated that these secured the success of the maritime industry in Malta for the future. He said Malta now had one of the first tonnage tax schemes to be approved by the Commission, and this continued to highlight Malta’s status as a future-looking country.

Dr Borg spoke of the legal certainty that was now being provided to operators in the industry saying this was also very relevant to attracting more investors to this area.