Introduction
Countries subject to surcharge


Introduction

In order to promote its aim of improving the quality of Cyprus shipping, the Merchant Shipping (Fees and Taxing Provisions) Law 2010(1) imposes a surcharge on the tonnage tax payable by qualifying vessels registered in countries which appear on the grey or black list of the Paris Memorandum of Understanding. Article 17(2) of the law provides for a surcharge of 30% payable by owners of ships registered in countries on the grey list and 60% for ships registered in countries on the black list. Articles 27(2) and 40(2) of the law provide that corresponding surcharges are payable by charterers and managers, respectively.

​Countries subject to surcharge

On the basis of the 2016 Paris Memorandum of Understanding annual report, the Department of Merchant Shipping has determined that the flags listed below are included in the relevant grey or black list for the purposes of calculating tonnage tax for 2017.

Grey list (30% surcharge)

Black list (60% surcharge)

Albania

Belize

Algeria

Bolivia

Azerbaijan

Cambodia

Bulgaria

Comoros

Curacao

Congo, Republic

Egypt

Dominica

Georgia

Honduras

India

Moldova

Jamaica

Montenegro

Korea

Sierra Leone

Kuwait

St Kitts and Nevis

Lebanon

Tanzania

Libya

Togo

Lithuania

Vanuatu

Malaysia

Mongolia

Morocco

Poland

Slovakia

Switzerland

Saint Vincent and the Grenadines

Syrian Arab Republic

Thailand

Tunisia

Tuvalu

Ukraine

Vietnam

Article 34(4) of the law provides that ships under management which fly a flag included on the Paris Memorandum of Understanding's black list will be deemed to comply with international and EU standards and thus qualify for the tonnage tax system only if the ship's technical and crew management is performed entirely from an EU member state. In the event of a breach of this requirement, Section 54 of the law empowers the Department of Merchant Shipping to impose penalties, including administrative fines and exclusion from the tonnage tax system.

For further information on this topic please contact Costas Stamatiou at Elias Neocleous & Co LLC by telephone (+357 25 110 110) or email ([email protected]). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.

Endnotes

(1) Law 44(I)/2010.