This scheme lays down a level playing field between shipping companies in Malta and those in wider Europe, while further encouraging ship registration, which will in turn continue to bolster our thriving registry. “Today we have a solution for a very successful future”, Dr Borg said.
Malta has been discussing this scheme and other tax measures with the Commission since October 2011. On 26 July 2012, the European Commission informed Malta that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (“TFEU“) on possible illegal aid measures applied by Malta in favour of shipping companies and their shareholders. The discussions have been difficult and technical, and they stretched out over a number of years, proportionately to the sensitivity of this sector and its importance to our country, a sector which employs many people, both directly and indirectly.
The current Government inherited this problem in 2013, but remained focused and committed to ensure that a fair deal would be attained, in the interest of those operating under the Maltese Flag, the Maltese economy, and the wider European shipping industry.
Today’s decision relates to the Maltese tonnage tax scheme, and comes with several legal and economic benefits. The tonnage tax scheme comes with specifications on eligible vessels, specific types of income and activities of tonnage tax ships subject to tonnage tax and the tonnage tax scheme, including the extension of the tonnage tax to non-core shipping activities, the level of tonnage tax, the flag link requirement, and ring-fencing measures.
Minister Borg spoke of the hard work and negotiations which have taken place over the past years, and stated that these have secured the success of the maritime industry in Malta for the future. He expressed with pleasure that Malta now has one of the first tonnage tax schemes to be approved by the Commission, and this continues to highlight our status as a future-looking country. Dr Borg spoke of the legal certainty that is now being provided to operators in the industry in our country, a fact which is also very relevant to attracting more investors to this area.
The Minister concluded by expressing his satisfaction and pride with the maritime sector and with this milestone achievement, which augurs well for further investment and employment in this sector.
Source: Press Release by Ministry Transport, Infrastructure and Capital Projects