Sweden introduces a long awaited system for Tonnage Tax
Yesterday the Swedish government submitted a proposal to the Parliament for a tonnage tax system that allows Swedish shipping companies to operate under competitive conditions similar to other countries in Europe. The aim of the government is to increase the competitiveness of the Swedish merchant fleet and increase the number of Swedish flagged vessels.
“Tonnage tax has been eagerly awaited by the business community and I am pleased that we will now have a system of tonnage tax in place. I look forward to seeing more Swedish flag vessels.” says Magdalena Andersson, Minister for Finance.
Tonnage tax implies that the taxable income of qualified shipping operations are determined at a flat rate based on the net tonnage of the vessels, regardless of income and expenditure. One of the benefits of a tonnage tax system is that the tax matters will be less important for a shipping company’s investment decisions.
Tonnage tax will be optional. Shipping companies who wish to enter the tonnage tax system rather than being taxed conventionally will have to apply for tonnage tax in advance. An approval for tonnage tax will be valid until further notice. The company may as a rule, leave the system at the earliest after ten fiscal years.
The new provisions would enter into force on 20 July 2016 and applied for the first time for fiscal years beginning after December 31, 2016. One condition is that the European Commission approves the proposed rules.
Read more (Swedish)