TTM06050 - Relevant Shipping Profits: Core qualifying activities

Definition of ‘core qualifying activities’

Paragraph 46 provides that a company’s ‘core qualifying activities’ consist of

• activities in operating qualifying ships, and
• other ship-related activities that are a necessary and integral part of the business of operating those qualifying ships.

Operating ships

Operation of the ship is defined by paragraph 18 in terms of ownership and charter, but to be qualifying the ship must, under paragraph 19(1), be used for

• transport of passengers or cargo,
• towage salvage or other marine assistance, or
• transport in connection with other services of a kind necessarily provided at sea.

‘Necessary and integral’

Activities are a ‘necessary and integral part of the business’ if they tare essential to enable the ship operation to take place. Thus the definition will encompass:

• ship management operations, such as purchasing fuel and hiring crew, and
• commercial management operations such as booking cargo.

Activities not included

The definition of ‘core qualifying activities’ will not include every ship-related activity that a company may carry on. In particular, the definition does not cover:

• activities that are merely customary or desirable
• activities carried out on behalf of other companies in the same tonnage tax group

Although they are not ‘core qualifying activities’, such activities may be ‘qualifying secondary activities’ (see TTM06100), or possibly ‘qualifying incidental activities’ (seeTTM06200)

References