period as result of which financial year 2013 has not been designated an excepted
year.
38
4 Maritime State Aid
4.1 Preliminary Observations
As discussed in the chapter relating to ship registries, there has appeared, since the
1950s, tonnage tax regimes or similar taxation regimes with the objective of
supporting the maritime industry which are the essential economic backbones for
countries, such as Greece, Cyprus, Malta, etc.
39 The inventor of the tonnage tax
concept is in fact not the EU; the practice was imported from the typical open
registry states. In order to boost the EU maritime industry which faced fierce
competition from low tax jurisdictions and offshore open registries, the EU being
aware of various measures being taken by individual states decided to develop
Guidelines for state aid to the maritime industry. Introducing and harmonizing
tonnage tax regimes among the member states is undoubtedly one of the most
important elements in the Guidelines the main purpose of which is to foster
enhancement of the internal market in accordance with EU norms
40 by granting
member states the possibility of adopting tonnage tax regimes subject to certain
prescribed limitations. Although the tonnage tax scheme has generally been regarded
as a form of state aid, its operation within the purview of EU law is considered to be
legitimate provided there is compliance with the strictures provided by the
Guidelines.
41
The first Guidelines for maritime state aid were published by the European
Commission in 1989, and were subsequently reviewed and amended in 1997. The
aim was to maintain the fleets as much as possible within the EU.
42 It was recognized
by the European Commission, that to some extent, state aid for shipping was
necessary to foster the growth and advancement of EU shipping which had being
witnessing undesirable times of decline. However, there has always been concern
over inconsistency of policy and practice among Member states. To address the
incongruence, the Commission published a revised set of Guidelines in a Communication dated 17 January 2004 specifying in particular, the limits to which such
38 For the purpose of the flagging test, member states’ registers include all registers subject to the law
of the member states applying to their territories forming part of the EU and also Norway, Iceland.
The secondary registries included are DIS, ISR, MAR, NIS, the Italian International Ship Register,
the Canary Islands, and Gibraltar Registers. The Kerguelen, Dutch Antilles, Isle, Bermuda, and
Cayman Islands registers are not considered to be Member States’ registers.
39 OJ C 13, 17.1.2004, p. 3.
40 OJ C 205,5.7.1997, p. 5.
41 Art 3-6 TFEU, see also Helminen (2011), p. 2.
42 OJ C 205,5.7.1997, p. 5.
The United Kingdom Tonnage Tax Regime: Compatibility with Relevant. . .
727
year.
38
4 Maritime State Aid
4.1 Preliminary Observations
As discussed in the chapter relating to ship registries, there has appeared, since the
1950s, tonnage tax regimes or similar taxation regimes with the objective of
supporting the maritime industry which are the essential economic backbones for
countries, such as Greece, Cyprus, Malta, etc.
39 The inventor of the tonnage tax
concept is in fact not the EU; the practice was imported from the typical open
registry states. In order to boost the EU maritime industry which faced fierce
competition from low tax jurisdictions and offshore open registries, the EU being
aware of various measures being taken by individual states decided to develop
Guidelines for state aid to the maritime industry. Introducing and harmonizing
tonnage tax regimes among the member states is undoubtedly one of the most
important elements in the Guidelines the main purpose of which is to foster
enhancement of the internal market in accordance with EU norms
40 by granting
member states the possibility of adopting tonnage tax regimes subject to certain
prescribed limitations. Although the tonnage tax scheme has generally been regarded
as a form of state aid, its operation within the purview of EU law is considered to be
legitimate provided there is compliance with the strictures provided by the
Guidelines.
41
The first Guidelines for maritime state aid were published by the European
Commission in 1989, and were subsequently reviewed and amended in 1997. The
aim was to maintain the fleets as much as possible within the EU.
42 It was recognized
by the European Commission, that to some extent, state aid for shipping was
necessary to foster the growth and advancement of EU shipping which had being
witnessing undesirable times of decline. However, there has always been concern
over inconsistency of policy and practice among Member states. To address the
incongruence, the Commission published a revised set of Guidelines in a Communication dated 17 January 2004 specifying in particular, the limits to which such
38 For the purpose of the flagging test, member states’ registers include all registers subject to the law
of the member states applying to their territories forming part of the EU and also Norway, Iceland.
The secondary registries included are DIS, ISR, MAR, NIS, the Italian International Ship Register,
the Canary Islands, and Gibraltar Registers. The Kerguelen, Dutch Antilles, Isle, Bermuda, and
Cayman Islands registers are not considered to be Member States’ registers.
39 OJ C 13, 17.1.2004, p. 3.
40 OJ C 205,5.7.1997, p. 5.
41 Art 3-6 TFEU, see also Helminen (2011), p. 2.
42 OJ C 205,5.7.1997, p. 5.
The United Kingdom Tonnage Tax Regime: Compatibility with Relevant. . .
727