Advantages of the Cyprus flag
The most important advantages of ships under the Cyprus Flag are:
- No income tax on the profits derived by a Cyprus shipowning company nor any tax on any dividend of any Cyprus shipowning company
(including chartering of any nature of any vessel) S.4 of the Merchant Shipping Laws no 38(1) of 1992.
- No tax on dividends of a Cyprus shipping company
- No estate duty on the inheritance of shares
- No capital gains tax on the sale or transfer or the transfer of the shares of the shipowning company
- No tax on the salaries of crew members
- The possibility of employing any nationality of crew members in view of the limited availability of the Cyprus crew
- Recognition of the Crew Competence Certificate issued by Cyprus
- Application of the English Law
- Existence of a Collective Agreement between Trade Unions and Shipowners
- Cyprus ships can call at any port in the world, and in most, enjoy favoured national treatment
- Possibility of provisional registration taking place abroad
- Minimum of red tape
- Low tonnage tax and other duties paid for registration fees, annual tonnage tax , mortgages etc
- No stamp duty on ship mortgage deeds
- Full protection and recognition of mortgages registered on a Cyprus ship
- Possibility of parallel registration of Cyprus ships in other countries
- Possibility of parallel registration of foreign ships in the Cyprus Registry
- Existence of bilateral agreements between Cyprus and other countries
- Existence of high quality professional services (accountants, lawyers, bankers etc)
- Perfect telecommunication services
If the management and control of the shipowning company or the ship managing company is in Cyprus then no tax is paid, not only in Cyprus
but also in certain other countries such as the Netherlands, Germany (with some restrictions), Denmark, Ireland, Sweden, United Kingdom
and Norway to mention but a few with whom Cyprus entered into Double Tax Treaties.
In the cases of offshore shipping companies, that they establish their own offices in Cyprus, provisions have been made for their expatriate
employees and who are working in Cyprus (deriving income from sources or activities lying outside Cyprus) to be taxed at the equivalent of
one half of the normal Cyprus tax rates (which varies between 0 to a maximum of 15% on their chargeable income) If they are working abroad
and receive their salary through Cyprus then no income tax is payable.
Both the shipping companies and their employees as has been mentioned, may maintain accounts in foreign currency from which their income may
be freely remitted abroad, without exchange control approval.
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