EC investigating planned changes to Irish tonnage tax

EC investigating planned changes to Irish tonnage tax The European Commission has opened an investigation into planned changes by the Republic of Ireland to its shipping tonnage tax regime.
   Shipping companies in Ireland do not have to pay company tax but instead pay a flat-rate tax based on the tonnage of their fleet. The EC in 2002 approved the Irish tonnage tax scheme until 2012, but will now look at plans to modify the time charter rules laid down, which permit a ratio of one owned to three time-chartered ships.
   Irish authorities want to allow for a 100 percent time-chartered fleet to benefit from the scheme and furthermore make the revised scheme apply retroactively from Jan. 1, 2006. The EC has so far only allowed tonnage tax schemes with a time charter ratio of 1:3 or 1:4.
   “The opening of a formal investigation is a procedural step that gives the member state concerned and all interested parties an opportunity to comment. It does not prejudge the outcome of the commission’s inquiry,” the EC said in a statement.