EU Commission approves tonnage tax scheme

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PwC-skatteradgivning-private-sector.pngThe decision took some time but has now been taken – the EU Commission has given its approval to the Swedish tonnage tax scheme and the legislative process can continue.

The tonnage system is a special tax scheme proposed within the shipping industry. In brief, the tonnage tax scheme is described as a system by which shipping companies, provided certain requirements are met, can choose to be taxed on a standard basis based on the vessel’s loading capacity, instead of on their actual reported results. For further details regarding the proposed law and the requirements that must be met by a shipping company to enter into this tonnage tax scheme, we refer to the previous blog postings listed below.

The introduction of a tonnage tax scheme has been demanded in Sweden during many years, and in May 2016 we blogged about the Ministry of Finance’s bill to Parliament regarding Swedish tonnage tax. A premise for a decision by Parliament was that the proposal was to first be approved by the EU Commission. On 18 August 2016, which was later than expected, the decision from the Commission was finally announced and this implies that the legislative process can now continue.

The next step is that the Government Tax Committe is to present its report, that is, its proposal for adoption by Parliament, which the Parliament will subsequently decide upon. To date, all signals point towards the proposal having a broad base of support in Parliament and there are, therefore, high expectations that we will soon have a Swedish tonnage tax system in place.

As the date for the coming into effect of the new law was previously proposed as 20 July 2016, we can expect that the report will contain a new such date.

No date is yet to be determined for when the Tax Committee intends to present its report, but a date is expected to be published shortly. We have understood that there exists a high degree of unanimity in the desire to have this matter handled as quickly as possible. Based on the Minister of Finance’s statements in the media, we have understood that the original time schedule continues to apply; that is, that the scheme is to be able to be applied from 1 January 2017.
If this is to be the case, there is also the need of an adjustment of the time limits applying for application to enter the scheme. According to the Government bill, applications are to be presented no later than five months prior to the first income year to which the application refers, which means no later than 31 July 2016. It remains to be seen how the adjustment of these details will take place.

Ulrika Lundh Eriksson and Rebecka Fröjd

Do you have any questions on corporate taxation?

Ulrika Lundh Eriksson

Ulrika Lundh Eriksson

Ulrika Lundh Eriksson arbetar med nationell och internationell företagsbeskattning med särskild inriktning mot transport, logistik och shipping. Hon arbetar på PwC:s skatteavdelning i Göteborg.
010-213 14 17

Ulrika Lundh Eriksson works with national and international corporate taxation, specialising in transport, logistics and shipping. She works at PwC’s tax department in Gothenburg.
+46 10 213 14 17

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