Wilh. Wilhelmsen mulls flag switch due to tonnage tax changes
Wilh. Wilhelmsen profit slumps in 2007
Norwegian ship owner Wilh. Wilhelmsen ASA (WW) is preparing to transfer its Norway-flagged rolling cargo fleet to other registries due to changes to the Scandinavian country's tonnage tax scheme, hinted a senior company manager part of the majority shareholding Wilhelmsen family.
From Jan. 1, 2007, Norwegian owners were faced with the choices of either opting out of the old regime, which operated on a tax deferral basis, and be taxed immediately, or of entering the new regime and pay the previously deferred taxes over a period of 10 years.
Thomas Wilhelmsen, WW's group vice president of shipping, said Tuesday the new system has 'severely' affected WW's bottom line and equity.
The company's provision for deferred tax related to the changes is estimated at $208 million.
The 32-year-old son of chairman Wilhelm Wilhelmsen told Shippers' NewsWire at the Lysaker headquarters that the company gives the new scheme and the Norwegian politicians who introduced it 'pretty low' credibility ratings.
He added the company has yet to make a final decision to reflag the Norwegian registered vessels it owns and charters.
'We are still in the thinking box. At the end of May we need to file our tax return for 2007 and at that point in time we are forced to make a decision, so then we will see. But of course we have started several years ago to flag vessels under the U.K. flag, among others, which is a sign of lack of trust in the Norwegian system.'
The WW group transports almost 5 million cars annually through its three operating companies Wallenius Wilhelmsen Logistics and American Roll-on Roll-off Carrier (both owned equally with Sweden's Wallenius Lines), and EUKOR Car Carriers (WW and Wallenius each hold 40 percent and Hyundai Motor and Kia Motors holding the remaining 20 percent).
Between them, WW and Wallenius have about 45 vessels to be delivered through 2012. That order book includes eight new large car and truck carriers (LCTC) with capacity for 8,000 car equivalent units (CEUs) that will be deployed in Wallenius Wilhelmsen Logistics’ global trade. Thomas Wilhelmsen said the company is still weighing the flag choice for the four LCTCs it will own with options including the British, Singapore, Swedish and Norwegian flags.
However, the WW executive said the tonnage tax change is unlikely to drive the company out of Norway.
'There's always a possibility if things get too bad, but we are proud to be here,' he said. 'We live here. We have a lot of competent people in this country and we also want, as much as we are able, to support Norway as a shipping nation.' ' Simon Heaney