The Merchant Shipping Act and regulations made thereunder provide for a number of concessions and benefits in connection with ships registered under the Malta flag. The following is meant to provide some insight on the tax benefits enjoyed by shipping organizations registered in Malta that carry out activities consisting in the ownership or chartering of a tonnage tax ship.
Exemption from Income Tax
No income tax is charged or payable on:
- The income of a registered shipowner and a registered bareboat charter, in respect of gains or profits derived from the ownership or operation of an exempted ship;
- Any dividend paid to the shareholders of such company, and where the shareholder is itself a company, any dividend paid to the shareholders of such company, provided that in these cases the dividend is paid out of gains or profits derived from the operation or ownership of the said ship.
Moreover, no further tax under the Income Tax Act shall be charged or payable on any gain arising on the liquidation, redemption, cancellation, or any other disposal of shares, securities or any other interest, including goodwill, held in any licensed shipping organization owning, operating, administering or managing a tonnage tax ship while she was a tonnage tax ship.
In the case of a company whose objects are limited for the sole purpose of owning or operating Tonnage Tax Ships and ancillary transactions such a company is dispensed from filing the Income Tax Return and audited accounts normally required of Maltese companies. Instead it can file a declaration made by a Maltese auditor or an advocate in accordance with the prescribed form.
Additionally income tax is not payable by any person on interest or other income payable to him in relation to any financing of the operations of any shipping company or the financing of any tonnage tax ship. This exemption is not applicable to Maltese residents unless they are licensed banks, credit or financial institutions under the provisions of applicable law.
Exemption from Duty
No duty otherwise chargeable under the Duty on Documents and Transfer Act is payable in respect of the registration of a tonnage tax ship, any sale or other transfer of such ship, the issue or allotment of any equity or other interest in a shipping organization, the registration, transfer or assignment of any security or interest in a shipping organisation or any vessel and any mortgage and the discharge or transfer thereof. |
