Bright future for Cyprus shipping
The EU"S approval of Cyprus" tonnage tax for shipping companies will bring stability and certainty to the sector, maritime authorities said yesterday. Last week, the Commission approved the tonnage taxation system operated in Cyprus and has given the green light for the system to remain in force until 2019 with the option of a further ten years until 2029.
?The new measures will enhance further Cyprus shipping and our national economy at a moment when international shipping is seriously affected by the persisting serious international economic crisis,? said Minister of Communications and Works Erato Kozakou-Markoulli, at a news conference yesterday.
?The basic benefit is certainty and stability,? said Serghios Serghiou, the Director of the Department of Merchant Shipping.
The shipping sector contributes 5 per cent to GDP and involves not only the flag but maritime support services including legal, accountancy and logistics firms.
Amongst EU countries Cyprus has the third largest shipping industry - behind Greece and Malta - and it is the tenth largest globally. There are over 1,000 vessels flying the Cyprus flag said Kozakou-Markoulli.
?This agreement provides a climate of stability to the field and this provides an opportunity for Cyprus to increase its percentage of the world shipping market,? said Michalis Phillipou, Director-General of the Cyprus Shipping Union of the EU approval.
Thomas Kazakos, Director General of the Cyprus Shipping Chamber, noted that, while it would be logical to expect an expansion of the shipping industry as a result of the EU decision, it was too soon to say how international players would react.
But what was virtually certain now was that the companies in Cyprus who were currently involved in the sector would be sure to remain, he said.
?To be here in Cyprus they need it to be competitive. Cyprus is not the cheapest, and it is not our aim to be the cheapest, but to have the most competitive overall package,? he said.
Under the tonnage scheme which Cyprus operates, shipping companies can opt for a tax calculated on the net tonnage of their fleet, instead of being taxed on the actual profits of their maritime activities.
Cyprus-registered vessels also benefit from Cyprus"s inclusion on the White Lists of Paris and Tokyo, two international agreements which result in ships being subjected to fewer supervisory checks at foreign ports.
The EU approval involves a number of legislative changes to the finer details governing how the shipping sector is administrated in Cyprus, which are to be ?enacted in the coming weeks?.
?This approval constitutes perhaps the most important success for Cyprus Shipping since the formation of the Republic of Cyprus,? said Kazakos.