EC issues guidelines on state aid to European shipping

EC issues guidelines on state aid to European shipping    The European Commission on Thursday announced new guidelines on state aids and tax incentives provided by European Union countries to the shipping industry.
   The guidelines “provide new guidance on tax exemptions rules for seafarers and public support to short sea shipping,” the EC said.
   The guidelines continue to allow European governments to support the European maritime industry through tax incentives.
   The EC said that its new framework will significantly contribute to the    promotion of shipping and give the “needed instruments for maintaining a competitive and of quality EU flag.” The aim is to further ensure a favorable tax environment for shipowners to counter international competition by open registers and flags of convenience, the Brussels-based executive said.
   The guidelines allow tonnage tax schemes, reduced fiscal and social security contributions for seafarers and training aid.
   New rules for short sea shipping were also introduced. Subsidies may be granted by governments for the launching phase of new services to permit the transport of cargo by road “to be carried out wholly or partly by sea.” The subsidies must be limited in time to a period of three years maximum.
   On the tonnage tax and tax cut schemes for seafarers, the EC said that tonnage tax schemes exist in Belgium, Denmark, Finland, France, Germany, Ireland, Greece, Netherlands, Spain and the United Kingdom. Seafarer tax reduction measures are in force in Belgium, Denmark, France, Finland, Germany, Italy, Greece, the Netherlands and Sweden.
   The EC said that its survey of EU countries found that tax relief measures “obtained good results in terms of a significant volume of tonnage being re-flagged.” It also admitted that the share of the world tonnage registered in the EU countries has slightly decreased. The fleet registered in the registers of the EU countries increased on average by 0.4 percent per year in number of ships, and of 1.5 percent in tonnage, the EC said.