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Tonnage regulations

Priority: no maritime transport without effective tonnage regulation

Dutch shipowners:

“In order to keep the management of ships by Dutch shipowners in the Netherlands, maintenance of the tonnage regulations is an indispensable foundation of Dutch shipping and the Dutch maritime sector as a whole.”

The tonnage regulations are in need of major maintenance. Currently, the tonnage regulations can be applied to ships carrying out transport activities and a number of specific types of ships. Due to technological developments and societal need, the KVNR advocates reversing this to create a non-exhaustive list of qualifying ships.

 

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KVNR - Lodewijk Wisse - Belastingen, Juridische zaken en Nationale Politiek - web
Contact

 

Lodewijk Wisse
Tax and Legal | Kingdom Relations

+31 6 8397 8355
+31 10 2176 270
wisse@kvnr.nl

KVNR - Nathan Habers - Public Relations, Crisisco├Ârdinatie en Geopolitiek - web
Press inquiries

 

Nathan Habers
Public Relations


+31 10 2176 264
habers@kvnr.nl

Context

The tonnage regulations have existed in the Netherlands since 1996. Since then, practically all countries with a maritime sector have introduced tonnage regulations.

Tonnage regulations are a profit-tax scheme specific to the shipping industry. Shipping companies and ship managers can choose either for a 10-year period to apply the normal profit-tax regulations or the tonnage regulations. This requires coordination with the relevant tax authorities.

The previous minor maintenance of the Dutch regulations took place in 2010. Since then, the shipping industry has continued to develop and new types of ships have come into service. For example, ships used in the construction of offshore wind farms. These ships do not fall within the scope of the tonnage regulations, but should be covered by it given the nature of their work.

The challenge

In 2021, the Ministry of Infrastructure and Water Management, in coordination with the Ministry of Finance, commissioned Deloitte to evaluate the maritime fiscal regulations.

The evaluation report was sent to the Dutch House of Representatives by the Minister of Infrastructure and Water Management in 2022. Deloitte’s conclusion was that the tonnage tax regulations and the tax rebates for the shipping industry are conditional for the existence of a Dutch fleet and a Dutch maritime cluster. To compete with global competition, Deloitte also recommended broadening the scope of the tonnage tax scheme to ships working in the offshore industry.

In February 2023, the House of Representatives adopted a motion, submitted by Chris Stoffer (SGP), instructing the government to bring ships active in the offshore industry fully under the scope of the tonnage tax regulations and the tax rebates. Of course, this must be worked out within European frameworks regarding state subsidies.

The tonnage tax regulations are therefore in need of major maintenance. Currently, the tonnage tax regulations can be applied to ships carrying out transport activities and a number of specific type of ships. However, due to technological developments and social needs, the KVNR advocates reversing this to create a non-exhaustive list of qualifying ships.

State of play - 10 October 2023

The KVNR advises updating the list of qualifying ships for the tonnage tax regulations, with the tonnage tax regulations becoming primarily technology-neutral regulations.

This should result in a non-exhaustive list of qualifying ships that will promote progress. All vessels – whatever shape and type – carrying out transport activities should qualify. This will level the fiscal playing field with our surrounding maritime countries. In any case, as a result, work vessels, dredgers, chase and guard vessels, stone-dumping vessels and other vessels used for maritime assistance, as well as transport vessels that, for instance, transport CO2 from land to storage sites at sea, should qualify for the tonnage tax regulations.

The effect of this is that, in the future, new type of ships will also fall under the scope of the tonnage regulations, without the need for a legislative amendment and consultation with the European Commission.