All vessels utilized in navigation, excluding those powered by oars, are eligible for registration in Cyprus. This eligibility is contingent upon compliance with age and type-related prerequisites outlined in the Official Government Policy and the ownership criteria stipulated in the Merchant Shipping (Registration of Ships, Sales and Mortgages) Law of 1963, as amended.
𝐓𝐨𝐧𝐧𝐚𝐠𝐞 𝐓𝐚𝐱 𝐒𝐲𝐬𝐭𝐞𝐦: 𝐀 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞 𝐟𝐨𝐫 𝐌𝐚𝐫𝐢𝐭𝐢𝐦𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬
Cyprus boasts a unique advantage for companies engaged in international maritime transport through its tonnage tax system, offering a special reduced tax that replaces corporate tax. Valid until December 31, 2029, this system allows companies to choose a tax based on the net tonnage of their fleet, providing an alternative to conventional profit-based taxation.
Shipowners of Cyprus-flagged vessels automatically enter the tonnage tax system, with a commitment to remain for 10 years. Early withdrawal incurs penalties, making it crucial for shipowners to assess the long-term benefits against potential consequences.
The tonnage tax system extends its coverage to profits from shipping operations, management, dividends, sale of the ship, and interest earned on working capital or ship-related financing. Understanding the scope is vital for companies operating within this taxation framework.
𝐀𝐝𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐓𝐚𝐱 𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬: 𝐁𝐞𝐲𝐨𝐧𝐝 𝐓𝐨𝐧𝐧𝐚𝐠𝐞 𝐓𝐚𝐱
Cyprus offers a spectrum of tax advantages, including no estate duty on inheritance, no income tax on officers' and crews' wages, low tonnage tax based on gross tonnage, and no stamp duties for ship mortgage deeds or security documentation. The country has also established double tax treaties with over 43 nations, enhancing its appeal as a maritime hub.
In addition to tax incentives, Cyprus provides an attractive and cost-effective registration process, low operating costs for locally owned companies, EU flag status with access to the European economic area, and adherence to international maritime conventions on pollution and safety.