The EC has conditionally approved under EU State aid rules the Maltese tonnage tax scheme for a period of 10 years. This scheme lays down a level playing field between shipping companies in Malta and those in Europe, while further encouraging ship registration, which will in turn continue to bolster Malta’s shipping registry.
Malta has been discussing this scheme and other tax measures with the Commission since October 2011. On 26 July 2012, the European Commission informed Malta that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (“TFEU“) on possible illegal aid measures applied by Malta in favour of shipping companies and their shareholders. The discussions have been difficult and technical, and they stretched out over a number of years.
Malta now has one of the first tonnage tax schemes to be approved by the Commission. This provides legal certainty that is now being provided to operators in the industry, thus attracting more investors to the shipping industry.