Tonnage Tax - Shipping

Tonnage Tax - Martime Transport-Green Shipping

Portuguese Tonnage Tax Scheme for Ships – Benefits

The European Commission has approved under EU State aid rules a Portuguese tonnage tax that will support seafarers,in encouraging ship registration in Europe.In addition, for certain more environmentally-friendly ships, companies can achieve an additional reduction of 10% to 20% of the tax base under the tonnage tax scheme.

Commission approves Portuguese Tonnage Tax and Seafarer Scheme

Under the newly introduced Portuguese tonnage tax scheme, maritime transport companies will pay taxes on the basis of the net tonnage (i.e. the size of the shipping fleet) operated in maritime transport activities rather than on the basis of their taxable profits.

What is Tonnage Tax - Purpose.

The so-called Tonnage Tax is one of the ways that some Member States of the European Union found to respond to the global and competitive maritime freight transport market. Secondary registries, as is the International Register of Madeira(MAR), paved the way for tonnage tax to be applied. It is not a tax, but a method of determining the tax base, depending on the net tons transported by each vessel. It is an alternative to the normal income tax regime (IRC), being an option for shipowners to exercise if they so choose.

Requirements - Portuguese Tonnage Tax System.

Legal requirements as follows:
  • At least 60% of the respective net tonnage must fly a flag of a European Member State (EU) or an Economic European Area State (EEA) and be managed from an EU or EEA State;
  • In terms of chartering, the net tonnage of the ships under a charter cannot exceed 75% of the total fleet of the charterer and must comply with the flag and management requirements detailed above;
  • At least 50% of the crew of the relevant ships must be nationals from EU, EEA or Portuguese-speaking countries, except for very limited exceptional cases.
Portuguese Tonnage Tax Regime

Tax Details

Net Tonnage Daily Taxable Income for Each 100 net Tonnes
Up to 1,000 net tonnes € 0.75
1,001-10,000 net tonnes € 0.60
10,001-25,000 net tonnes € 0.40
Over 25,001 net tonnes € 0.20
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Support Crew

Seafarer Scheme

Crew members that are employed on vessels eligible under the tonnage tax regime can be exempt from paying personal income tax (IRS). A minimum of 90 days on board the vessel is required in each tax year, as well as meeting a number of other conditions.

The new scheme also allows the crew to pay reduced social security contributions; total rate of 6%, 4.1% paid by the employer and 1.9% by the member of the crew.


Crew members will be covered by the general social security regime and shall be entitled to parental, unemployment, illness, occupational illness, disability, old age and death benefits, subject to a contribution rate of 6% (4.1% paid by the employer and 1.9% by the crew member).



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Covered & Excluded Maritime Activites

COVERED ACTIVITIES

  • Maritime transport of persons and goods, namely the transport as such, the sale of goods for consumption onboard as well as the supply of services directly related with the transport.
  • Activities of research vessels, support of offshore activities, and towage and dredging are covered, provided that, among other things, 50% of the annual operations constitute maritime transport. (EXPLICITLY) EXCLUDED ACTIVITIES
  • The tonnage tax scheme generally excludes the activities not covered by the scheme, but it also explicitly excludes, namely, the following activities:
  • regular passenger transport activities, unless carried out in Madeira and the Azores;
  • activitiestheobjectofwhichisnotthe transport of goods or passengers, such as fishing;
  • provision of services consisting of loading, unloading, piloting, and towing to third parties;
  • museum activities, feasibility studies, exploration and extraction of natural resources, and marine conservation;
  • permanentlyanchoredvessels;and
  • leisure, recreational, educational, or
  • social activities. 

EXCLUDED ACTIVITIES

  • Regular passenger transport activities, unless carried out in Madeira and the Azores;
  • Activitiestheobjectofwhichisnotthe transport of goods or passengers, such as fishing;
  • Provision of services consisting of loading, unloading, piloting, and towing to third parties;
  • Museum activities, feasibility studies, exploration and extraction of natural resources, and marine conservation;
  • Permanently anchored vessels;and Leisure, recreational, educational, or social activities. 
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