Greek tonnage tax will triple: ship owners cry “foul”

Ship owners voiced their dismay at the recent tax law, adopted late in December of 2013, under which the tax tonnage they’re liable to pay will be tripled for the next three years, as a result of the country’s economic problems. In his annual speech, delivered on the occasion of the General Meeting, the President of the Union of Greek Shipowners (UGS), Mr. Theodoros Veniamis said that the new tax is against the constitution, which protects the tax-free nature of shipping companies in Hellas.

The new tax is obligatory to all ships which are owned, controlled or managed by Hellas-based shipping companies, regardless of the Flag State they have adopted. This development was deeply frustrating for ship owners, who, through UGS said that in effect, it renders void the recent voluntary agreement, which they signed with the government a few months back, under which, ship owners will double their annual contribution to the country’s budget.
The voluntary basis of this agreement was the main reason (probably after pressure from the troika of creditors), behind this new tax, which, according to Mr. Veniamis won’t yield the proper results.

The previous voluntary agreement was signed by owners controlling more than 90% of the Hellenic-flagged ships and about 65% of those flying foreign flags. In total, ship owners would contribute 75 million euros annually, while the numbe was expected to rise to about 140 million euros per year, as more and more ship owners are expected to take part in this deal. However, the government decided to move forward with its new tax a few months later, probably due to the low payout of this voluntary agreement. According to Mr. Veniamis, “if the government was worried about the lower than estimated financial contribution, we could have worked out an agreement, or we could attract more vessels under the Hellenic Flag”.
Under the original agreement between the government and the shipping industry, owners would voluntarily double their contributions to the state for a period of three years, via the tonnage tax regime. This would apply to all Hellenic-owned vessels, either those flying the Hellenic flag, or those flying other flags. Earlier in 2013, it was made known that all Hellenic ship owners were liable to paying tonnage tax on ships operating under flags other than the Hellenic flag, whether they are managed by companies based in Hellas, or by offshore companies which have a branch in Hellas and are operating under Law 89 of the Greek constitution.

ORDERBOOK AND FLEET NUMBER
In his speech, Mr. Veniamis also noted that despite yet another challenging year, Hellenic ship owners have an outstanding orderbook of 372 vessels under construction. They are also controlling 16.25% of the global fleet and 46.7% of the EU fleet, based on dwt. At the same time, owners from Hellas control 23.5% of the global tanker fleet and 18.5% of the global dry bulk fleet. According to him, the above numbers are made even more significant, given that 2013 was characterized by a volatile freight market, an oversupply of ships and the difficulty in securing bank financing.

According to the President of UGS, 2014 will probably turn out to be better for the shipping industry, mainly due to the growth prospects of the emerging and developing economies around the world, which will fuel demand, but only if the gradual balancing of the demand-supply equilibrium is continued.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

www.hellenicshippingnews.com

 

 

Greek tonnage tax will triple: ship owners cry “foul”

Ship owners voiced their dismay at the recent tax law, adopted late in December of 2013, under which the tax tonnage they’re liable to pay will be tripled for the next three years, as a result of the country’s economic problems. In his annual speech, delivered on the occasion of the General Meeting, the President of the Union of Greek Shipowners (UGS), Mr. Theodoros Veniamis said that the new tax is against the constitution, which protects the tax-free nature of shipping companies in Hellas.

The new tax is obligatory to all ships which are owned, controlled or managed by Hellas-based shipping companies, regardless of the Flag State they have adopted. This development was deeply frustrating for ship owners, who, through UGS said that in effect, it renders void the recent voluntary agreement, which they signed with the government a few months back, under which, ship owners will double their annual contribution to the country’s budget.
The voluntary basis of this agreement was the main reason (probably after pressure from the troika of creditors), behind this new tax, which, according to Mr. Veniamis won’t yield the proper results.

The previous voluntary agreement was signed by owners controlling more than 90% of the Hellenic-flagged ships and about 65% of those flying foreign flags. In total, ship owners would contribute 75 million euros annually, while the numbe was expected to rise to about 140 million euros per year, as more and more ship owners are expected to take part in this deal. However, the government decided to move forward with its new tax a few months later, probably due to the low payout of this voluntary agreement. According to Mr. Veniamis, “if the government was worried about the lower than estimated financial contribution, we could have worked out an agreement, or we could attract more vessels under the Hellenic Flag”.
Under the original agreement between the government and the shipping industry, owners would voluntarily double their contributions to the state for a period of three years, via the tonnage tax regime. This would apply to all Hellenic-owned vessels, either those flying the Hellenic flag, or those flying other flags. Earlier in 2013, it was made known that all Hellenic ship owners were liable to paying tonnage tax on ships operating under flags other than the Hellenic flag, whether they are managed by companies based in Hellas, or by offshore companies which have a branch in Hellas and are operating under Law 89 of the Greek constitution.

ORDERBOOK AND FLEET NUMBER
In his speech, Mr. Veniamis also noted that despite yet another challenging year, Hellenic ship owners have an outstanding orderbook of 372 vessels under construction. They are also controlling 16.25% of the global fleet and 46.7% of the EU fleet, based on dwt. At the same time, owners from Hellas control 23.5% of the global tanker fleet and 18.5% of the global dry bulk fleet. According to him, the above numbers are made even more significant, given that 2013 was characterized by a volatile freight market, an oversupply of ships and the difficulty in securing bank financing.

According to the President of UGS, 2014 will probably turn out to be better for the shipping industry, mainly due to the growth prospects of the emerging and developing economies around the world, which will fuel demand, but only if the gradual balancing of the demand-supply equilibrium is continued.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

www.hellenicshippingnews.com