Tax Update Shipping & Offshore - April 2023

Dear reader,

Again an update from the Shipping & Offshore team covering various worldwide updates from a tax perspective within this industry. Besides the updates below we note that the Dutch tax authorities started the disclosure of position papers prepared by its “Knowledge Groups” among others in respect of the Dutch tonnage tax regime. The positions expressed by the knowledge groups in so-called position papers serve as guidelines for tax auditors in their dealings with taxpayer files and taxpayer issues which in our view improve legal certainty for the taxpayer. You can find these positions via the following link (in Dutch).

Ernst-Jan Bioch

Meijburg & Co, April 2023

Content

1. UK
2. Suriname
3. Bermuda
4. Greece
5. KPMG Drilling Down

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1. UK

Budget: Additional flexibility in UK tonnage tax regime

The Budget announcements include some significant changes to the UK tonnage tax regime. The Spring Budget announcements include some significant changes to the UK tonnage tax regime, bringing welcome flexibility. These include reforms to make it easier to return to tonnage tax having left the regime, an extension of the regime to ship managers and increased entitlement to capital allowances for ship lessors. See this link to read more

2. Suriname - introduction of Several New Tax Acts

The National Assembly approved the 2023 Budget on 24 February 2023 introducing several new tax acts, including the General Customs Act, replacing the Shipping Act and the Import Duties Tariffs Act (in compliance with current international standards).  Go here for more information

3. Bermuda - increases Marine and Port Taxes

The Bermuda House of Assembly enacted new legislation on 13 March 2023, increasing taxes for services supplied by the Department of Marine and Ports by 5%.
The tax hike will be applied to several services provided to international shipping companies, including piloting services, berthing services, tug services and port services.

4. Greece - determination of shipping income eligible for tonnage tax regime

The Ministry of Finance recently issued Decision A. 1019/2023, for determining the main and auxiliary activities linked to maritime transport, and whose revenues are eligible to be covered by the tonnage tax regime.
According to the provisions of Law 27/1975, imposition of tonnage tax on ships flying the Greek flag, as well as on ships flying EU/EEA flags, exhausts any income tax liability of the shipowner and of the shareholder or partner of a Greek or foreign company of any legal form, on what concerns profits derived from the exploitation of ships.
Topics in the decision include the following:

• Shipping income derived from main activities eligible to be covered by the tonnage tax regime
• Income not eligible for the tonnage tax regime
• Shipping income derived from auxiliary activities eligible to be covered by the tonnage tax regime
• Income from auxiliary activities that is not eligible to be covered by the tonnage tax regime
• Other cases

Read a March 2023 report prepared by the KPMG member firm in Greece.

5. KPMG's oil and gas magazine, Drilling Down

Please see here the second edition of KPMG’s oil and gas magazine, Drilling Down, designed to be of interest to anyone with a connection to the industry. We hope it will bring you valuable topical insights and promote discussion and debate around the key issues facing our sector.
The oil & gas sector is entering a period of ongoing disruption. Companies are being asked to reinvent themselves from the subsurface up. This can best be characterized by the following:

• Performance is being assessed by new measures and metrics.
• They are facing massive changes in tax and regulatory environments they operate in.
• They are responding to rapidly evolving customer and stakeholder expectations.
• And they are doing so against a backdrop of significant socioeconomic and geopolitical uncertainty.

Digital solutions are one of the potential antidotes to disruption, if applied correctly, in that they can:

• provide oil & gas companies with the data they need to make strategic and operational decisions.
• give them the agility and flexibility to adapt to changing market conditions.
• offer the tools to create and execute new business models.
• form the foundations of the future of work. It can help to reduce risk, enhance insight and drive efficiency.
• deliver the agility that is needed when facing an uncertain future.

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