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Tonnage Taxes

TAXATION – SHIPPING


For the period ending on the 31st December 2020, no income tax shall be charged, levied or collected:

·  upon the income derived by the shipowner of a Cyprus ship from the operation of such ship (with the exemption of any fishing enterprises using Cyprus as their base);

·  upon the dividends paid to the shareholder or the members of a corporation, out of profits made from the operation of a Cyprus ship.

 

GOVERNMENT FEES AND TAXES

 

REGISTRATION FEES


Although Cyprus has much to offer in terms of infrastructure and maritime administration ultimately the bottom line is costs. In terms of registration fees and taxes, Cyprus is considered to be among the most competitive shipping centres in the world. The fees listed below are lower than those of Cyprus’ main competitors.

The fees are expressed in EURO (€). The registration fees are calculated as follows:

For vessels other than passenger ships:

GROSS TONNAGE

FEES (€)

For each gross unit up to 5.000

0,170860

For each gross unit between 5.001-10.000

0,136688

For each gross unit over 10.000

0,068344

The minimum fee is €213,58 and the maximum fee is €5.125,80


For passenger ships:

GROSS TONNAGE

FEES (€)

For each gross unit

0,256290

Minimum fee

427,15




TONNAGE TAX


Please refer to the First Schedule of The Merchant Shipping (Fees and Taxing Provisions) Law of 2010 . Information about the new Cyprus Tonnage Tax System can be found here.

To caclulate the Tonnage Tax for the year 2009 or earlier (i.e. according to the "The Merchant Shipping (Fees and Taxing Provisions) Law of 1992-2004") use this caclulator.

Terms of payment


The tonnage tax is payable on 31st March each year. Late payment results in the imposition of a 10% surcharge on the chargable and leviable amount of tonnage tax for every year of the delay or part thereof, until the final discharge of the chargeable and leviable tax.

In case of a deletion of the ship from the Register of Cyprus Ships before the expiration of the year for which tonnage tax has been paid for, the amount paid in excess shall be reimbursed to the shipowner or shall be credited against any other amounts due by any other ship of the same shipowner upon his application.


REDUCTION OF TONNAGE TAX


Section 8 of the Merchant Shipping (Fees and Taxing Provisions) Laws, 1992-2007 provides for the reduction and refund of the tonnage tax in the cases listed below.

Laid-up ships


If the ship is laid up for a period of more than 3 consecutive months the tonnage tax payable is reduced by 75 percent for the period during which the vessel is laid-up, provided that the Department of Merchant Shipping is duly notified not later than 3 months from the commencement of the lay up period.



FEES FOR THE REGISTRATION, TRANSFER, TRANSMISSION OR DISCHARGE OF MORTGAGES

A. Fees for the registration or transfer of a mortgage or transfer of interest in a mortgage with the Registrar of Ships


The fees payable are calculated as follows:

GROSS TONNAGE

FEES (€)

For each gross unit up to 10.000

0,034172

For each gross unit over 10.000

0,017086

Minimum fee

51,26

B. Fees for the Transmission of a mortgage


The fees payable are €85,43.

C. No fee is payable for the discharge of mortgages.



FEES FOR THE TRANSFER OF SHIPS


For the transfer of a ship to the ownership of another Cypriot company, the fees payable are calculated as follows:

GROSS TONNAGE

FEES (€)

For each gross unit up to 10.000

0,034172

For each gross unit over 10.000

0,017086

Minimum fee

51,26



DELETION OF A SHIP FROM THE REGISTER OF CYPRUS SHIPS

No fee is payable for the deletion of ships. However, all other statutory fees and taxes due or in arrears at the time of the vessel’s deletion should be paid.



FEES AND TAXES PAYABLE ON PROVISIONAL REGISTRATION


The following fees and taxes are payable at the time of the provisional registration of a vessel:

·  registration fees;

·  tonnage tax for 6 months;

·  fees for obtaining a licence to install and operate a wireless telegraphy and/or telephony station;

·  fee for the issue of the provisional certificate of Cyprus Registry.


These should be paid not later than the date on which the provisional registration of the vessel will be effected.




FEES AND TAXES PAYABLE FOR THE EXTENSION OF THE PERIOD OF PROVISIONAL REGISTRATION

For extending the period of the provisional registration of a vessel under the Cyprus flag for a maximum period of 3 months, the following fees and taxes are payable:

·  one half of the registration fees;

·  tonnage tax for 3 months.


These should be paid prior to the expiry date of the period of provisional registration.


FEES AND TAXES PAYABLE ON PERMANENT REGISTRATION
If the relevant registration fees have been paid at the time of the provisional registration of the vessel and the period of provisional registration has not expired, then no other fees and taxes are levied for the permanent registration of a vessel apart from:

·  fee for the issue of the certificate of Cyprus Registry;

·  payment of any other statutory fees and taxes due or in arrears at the time of the permanent registration of the vessel.

No other fee is payable if the permanent registration takes place before the expiry of the provisional registration period.


Otherwise the fees payable on provisional registration are payable a new.

FEES AND TAXES PAYABLE ANNYALLY

The following fees and taxes are payable each year:

·  tonnage tax;

·  fees for the renewal of the licence to install and operate a wireless telegraphy and/or telephony station.

FEES AND TAXES PAYABLE ON PARALLEL (BAREBOAT) REGISTRATION

The initial registration fees for the parallel registration of a foreign vessel under the Cyprus flag (parallel-in registration) are 20 percent higher than those applicable to the provisional or permanent registration of the vessel. If the foreign vessel under the Cyprus flag is deleted and thereafter re-registered and the chartering is effected to the benefit of the same charterer prior to the deletion, the re-registration fees are reduced by 50 percent. There is no increase in the tonnage tax or other dues payable and the vessel is subject to the same financial obligations as other Cyprus ships.

A Cyprus ship registered in parallel in a foreign register (parallel-out registration) has the same financial obligations as all other Cyprus ships, with the exception of the fees for the issue or renewal of the radio licence. If the vessel is deleted from the Cyprus Registry prior to the termination of her status of parallel-out registration, that part of the tonnage tax which is proportional to the period from her deletion until the termination of her status of parallel registration is reimbursed upon application.

The financial obligations of vessels (Cypriot and foreign) registered in parallel are payable in advance for the entire period of the parallel (bareboat) registration.

The above information was kindly provided by the Department of Merchant Shipping of Cyprus


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