Belgium: EC continues approval of tonnage tax regime | KPMG | GLOBAL

Belgium: EC continues approval of Belgian tonnage tax regime

Belgium: EC continues approval of tonnage tax regime

The European Commission today announced the “prolongation” of approval of various Belgian tax measures under EU state aid rules. The regime has approval through 2022.

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As explained in an EC release, the Belgian system provides that a shipping company is taxed on the basis of ship tonnage (i.e., based on size of shipping fleet) rather than the actual profits of the company. In particular, tonnage taxation will be applied to a shipping company's

  • Core revenues from shipping activities, such as cargo and passenger transport
  • Certain ancillary revenues that are closely connected to shipping activities (now capped at a maximum of 50% of a ship's operating revenues)
  • Revenues from towage and dredging as well as onshore ship management activities, subject to certain conditions

The Belgian regime requires that if a shipping company wants to benefit from the system, a significant part of its fleet must be registered in Europe (in an EU or EEA Member State). Belgian tax authorities have committed to extend the benefit of the tonnage tax regime to all eligible ships that fly an EEA flag (thereby preventing discrimination between shipping companies and registries of different EEA states, while preserving internal market rules on freedom of establishment).

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