More details of new tonnage tax unveiled
The Inland Revenue has published draft regulations and a statement of practice to clarify details of the new tax regime for shipping companies.
The Finance Bill included provisions for an optional new tax regime for shipping companies, which has been widely welcomed by the industry – tonnage tax.
Tonnage tax is an important part of the package of measures being introduced to encourage the resurgence of the UK shipping industry.
The regulations set out the proposed rules to determine the written down value of machinery or plant on the exit of the company from the tonnage tax regime and also when the company starts to use its machinery or plant for its offshore activities. They also give the meaning of ‘qualifying secondary activities’ for the purposes of the tonnage tax regime and in doing so provide descriptions and permitted levels
The draft Statement of Practice covers, in detail, the practical operation of the tonnage tax regime. It is structured in the same order as the legislation and covers the entire regime.
Subject to EC and Parliamentary approval, it is intended that the regime will be available for accounting periods commencing on or after 1 January 2000.