Cyprus: Tonnage Tax – Countries Whose Ships Are Subject To Surcharge

In order to promote its objective of improving the quality of Cyprus shipping, the Merchant Shipping (Fees and Taxing Provisions) Law of 2010¹ imposes a surcharge on the tonnage tax payable in respect of qualifying vessels registered in countries which appear on the 'grey list' or 'black list' of the Paris Memorandum of Understanding (MOU). Sections 17(2), 27(2) and 40(2) respectively provide for a surcharge, payable by owners, charterers or managers, of 30% for ships registered in countries appearing on the grey list and 60% for ships registered in countries appearing on the black list.

On the basis of the annual report of the Paris MOU for 2013, the Department of Merchant Shipping has determined that the countries listed below are included on the relevant grey or black list for the purposes of calculating tonnage tax for 2014.

Section 34(4) provides that ships under management flying a flag which appears in the black list of the Paris MOU will qualify for the tonnage tax system only if the technical and crew management of every such ship is performed entirely from the territory of an EU member state. In the event of breach of this requirement, Section 54 empowers the Department of Merchant Shipping to impose sanctions, including administrative fines and exclusion from the tonnage tax system.

Footnote

1.Law 44(I)/2010.

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