The European Commission has opened an in-depth investigation to examine whetherchanges to the French tax rules for maritime companies are in line with EU state aid rules. The Commission will in particular investigate the inclusion of time chartered vessels sailing under non-EU flags in the scope of a favorable fiscal regime based on the taxation of the fleet tonnage.
The term “time chartering” refers to transport services which are provided with vessels and crew temporarily rented from other companies. The opening of an in-depth investigation gives interested third parties the possibility to comment on the measure under assessment. It does not prejudge the outcome of the investigation.
In May 2003, the Commission approved the French tonnage tax scheme (caseSA.14551). For shipping companies that opt for this alternative taxation, the tax base for the corporate income tax is calculated from the tonnage of the fleet rather than the actual profits of the company. The scheme limited the eligibility of time chartered ships not flagged in the EU. This scheme was in line with the applicable1997 EU guidelines on state aid to maritime transport, which aim to enhance the competitiveness of shipping companies facing competition from non-EU businesses and boost jobs in the sector.
Afterthe adoption of the Commission’s updatedguidelines on State aid to maritime transport in 2004, France removed the specific flagging rules for time chartered vessels without informing the Commission. The Commission only became aware of this change through its recent monitoring of the implementation of approved state aid schemes.
At this stage the Commission considers that specific limits on the eligibility of time chartered ships that do notsail underthe flag of a Member State should be maintained. Neither the 1997 guidelines nor the 2004 guidelines contain explicit provisions on time chartering. However, in view of the objectives of these guidelines and the Commission’s previous decision practice, the Commission considers that allowing such favorable tax treatment to time chartered vessels sailing under non-EU flags should be limited.
Source: Europa
