Specifically, the Deputy Ministry of Shipping noted that the number of companies in the Mediterranean island’s tonnage tax system between since 2010 and 2019 has risen and also confirmed the attractiveness of the system and wider positive economic impact, Phileleftheros reports.

Over its decade-long implementation, the system has proved to be very successful also in regard to audits carried out by the European Commission and is – therefore – expected to be renewed for another 10 years.

“Tax breaks provided in the form of annual tonnage tax for Cyprus ships in the Cyprus Registry, as well as for Cyprus-based ship-management companies and for further sailors and sailors on board Cyprus ships improved the competitiveness of the Cypriot maritime industry and supported the Cypriot economy throughout the island’s financial crisis,” the report said.

It is believed that updated state contribution plans to be in implementation between 2020-2029 will be taken up by the 1,500-2,000 shipping companies operating in Cyprus (1,600 ship owners, 150 freighters, 80 ship managers) as well as by a number of seafarers who will receive the relevant income tax exemption. The estimated total annual state contribution is around €15.4 million.

The state contribution is expected to be largely covered by existing operations of companies already in Cyprus and from their further expansion of their activities, according to the report.

In addition, new shipping activities are expected to take place as a result of new attractive measures listed in the proposed bill.

TABLE

Number of companies registered in the tax system:

Category                      2010      2019

Ship managers             29           48

Freight Forwarders     14           48

Foreign ship owners      9          119

Total                               52         220

Source: In-Cyprus