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

On the basis of the annual report of the Paris MOU for 2015, 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 2016.

Grey list (30% surcharge)

Black list (60% surcharge)

Albania

Morocco

Azerbaijan

Algeria

Poland

Belize

Bulgaria

Slovakia

Bolivia

Curacao

Switzerland

Cambodia

Egypt

Syrian Arab Republic

Comoros

Georgia

Thailand

Dominica

India

Tunisia

Honduras

Jamaica

Tuvalu

Moldova

Kuwait

Ukraine

Montenegro

Lebanon

Vanuatu

Sierra Leone

Libya

Vietnam

St Kitts and Nevis

Lithuania

 

St Vincent and the Grenadines

Malaysia

 

Tanzania

Mongolia

 

Togo

Article 34(4) provides that ships under management flying a flag on the black list of the Paris MOU will be deemed to comply with international and EU standards and consequently qualify for the tonnage tax system only if the technical and crew management of every such ship is performed entirely from the territory of an EU member state. In the event of a breach of this requirement, Section 54 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 Andreas Neocleous & Co LLC by telephone (+357 25 110 000) or email (stamatiou@neocleous.com). The Andreas Neocleous & Co LLC website can be accessed at www.neocleous.com.

Endnotes

(1) Law 44(I)/2010.

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