K.P.S. Services Ltd
Ship Management and Shipping
The Cypriot Maritime Registry is ranked amongst the ten largest registries in the world. Since its establishment in the 1960’s the Republic of Cyprus has given emphasis in the maritime sector thus introducing in 1963 the law dealing with the registration of ships, sales and mortgages.
Through the years the law has been developed and alongside the double tax treaties and bilateral agreements with tax benefits to both foreign and local ship-owners Cyprus has become an international maritime center attracting quality tonnage and increasing numbers of first – rate shipping Companies.
Benefits under the Cyprus Shipping Activities
The Merchant Shipping Legislation allows for tonnage tax on the net tonnage of the ships. The foresaid was introduced by the new tonnage tax system (Law 44(I)/2010)and is applicable since the physical year 2010
No income tax on the emoluments of a Cyprus vessel’s officers and crew on board
The Merchant Shipping Legislation supports an open registry
Tax profit generated from transactions in titles is exempted
Inheritance of shares in a ship owning company is exempted from estate duty
A company or a group may choose to have mixed activities allowing them to benefit from both the tonnage tax system and the Cyprus Corporate Tax being the lowest tax in the European Union of 12.5%
From transports services taking place and enjoyed outside the European Union no VAT is charged since they are considered as international transport services
Exemption from withholding tax on the repatriation of income either in the form of dividends, interest and on almost all royalties
Registering a vessel in Cyprus
Vessels of any size may be registered in the Register of Cyprus Ships or under the Special Book of Parallel Registration as long as the applicable age related and type requirements are complied with. ‘’Age’’ means the age of the ship delivered by deduction the year in which the keel of the ship was late from the year in which the application for its registration was submitted with the Registrar Cyprus Ships.
The registration of a vessel in the Register of Cyprus Ships or the Special Book of Parallel Registration, may be allowed as long as the following requirements relating to the type and age of the ship are complied with: Click Here ->
A vessel can only be registered in the Register of Cyprus Ships only if Cypriot citizens owe more than 50% of the shares or by citizens of other EU member states who in case of not receding permanently in the Cyprus Republic, will appointed an authorized representative in the Republic. The above Company must be registered as a limited liability Company under the provision of the Cyprus Companies Law.
There are three types of vessel registration in Cyprus and are as follows:
Tonnage tax system
The Cyprus Tonnage Tax System offers a competitive advantage and covers all three maritime activities including ship-owning, ship-management (crew and technical management) and chartering.
The foresaid law allows ship-owners, charterers and ship managers to be fully exempted from all profit taxes and imposes tonnage tax on the net tonnage of the vessels at the following rates:
|Units of net tonnage||Ship-owners & charterers|
€TT per 100 units
€TT per 400 units
|0 – 1.000||36.50||36.50|
|1.001 – 10.000||31.03||31.03|
|10.001 – 25.000||20.08||20.08|
|25.001 – 40.000||12.78||12.78|