Tonnage tax is an important part of the package of measures being introduced to encourage the resurgence of the UK shipping industry.
1. The draft regulations now published 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
2. 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.
Copies of the draft Regulations and Statement of Practice may be obtained from:
The Tonnage Tax Team
Room 211, Victory House
London WC2B 6ES
NOTES FOR EDITORS
3. In August 1999 the Deputy Prime Minister announced the Government’s intention to introduce a tonnage tax in the UK, following the publication of an independent report by Lord Alexander of Weedon QC.
4. The regime has been developed with the benefit of full public consultation, in particular with the shipping industry and other interested parties. Draft legislation for the regime was first published on 23 December, and may now be found at Schedule 22 to the Finance Bill. A company electing into tonnage tax would have its taxable profits based on the tonnage of the ships it operates rather than by reference to accounting profits.
5. 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.