International - Tonnage Tax
Following extensive consultation the Tonnage Tax - an optional regime for shipping companies - was introduced into the UK tax system as part of Finance Act 2000. The provisions implementing the regime form part of the Government's wider policy to bring about a reversal in the decline of the UK fleet and have been widely welcomed by the shipping industry.
Treasury Orders have been made to provide:
- A new window of opportunity to elect in to tonnage tax. The window will be from 1 July 2005 to 31 December 2006. SI 2005 No. - The Tonnage Tax (Further Opportunity for Election) Order 2005
- That for the financial year 2005 there is no requirement for vessels to be registered in an EU Member State in order to enter tonnage tax. SI 2005 No. - The Tonnage Tax (Exception of Financial year 2005) Order 2005
The estimated cost of tonnage tax has been revised. The revised estimates are:
| £m | |
|---|---|
| 2000 - 01 (actual) | 12.8 |
| 2001 - 02 (actual) | 39.1 |
| 2002 - 03 (actual) | 38.1 |
| 2003 - 04 (provisional) | 30.1 |
These represent the difference between the corporation tax payable
on tonnage tax profits and an estimate of the tax that would have been
payable on the shipping activities of tonnage tax companies that chose
to elect into the regime when it was introduced.
- The primary legislation can be found at Schedule 22 Finance Act 2000.
- To accompany the legislation, and in order to clarify how the regime works, the Inland Revenue has issued a comprehensive Statement of Practice (PDF 2.76MB)
- And the Inland Revenue's Tonnage Tax manual ("TTM") is now available on line too.
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