Amendments to the Merchant Shipping (Fees and Taxing Provisions) (as amended) Law of 2020 (MSL)
Οn 15 April 2020, the Cyprus Parliament enacted the relevant legislation, the Merchant Shipping (Fees and Taxing Provisions) (as amended) Law of 2020 (MSL) to apply from 1 January 2020 to 31 December 2029.
• A non-exhaustive list of qualifying vessels is introduced.
• Bareboat charter out agreements remain eligible for tonnage tax, with restrictions introduced for bareboat charter agreements to third parties.
• A specific description/list of what constitutes “ancillary services” is included. “Ancillary services” fall under the TT regime, provided that their income does not exceed 50% of the total income generated from Maritime Transport Activities.
• Incentives, such as up to 30% lower TT, are provided for environmentally friendly vessels.
• The Seafarer Scheme which applies a zero-rate income tax for crew members on board Cyprus flagged vessels is now extended to EU/EEA qualifying ships engaged in qualifying activities.