Shipping is an inherently international business and efficient management of tax issues across multiple jurisdictions is key to success. We have an unparalleled level of knowledge and experience of UK and international shipping and tonnage tax.
By working closely with you, our commercial approach ensures that your tax issues are fully addressed. As well as tax compliance services, we provide support on:
The UK tonnage tax regime provides an alternative way of calculating the taxable profits of UK shipping businesses. Entry to the regime usually results in the entity obtaining a corporate tax saving. However, there are a number of potential pitfalls, such as ceasing to qualify for the regime part way through the 10 year election period and the EU flagging rules. In addition, bareboat chartering out a ship so that it ceases to qualify for the regime, or ceasing to bareboat charter out a ship so that it falls within the tonnage tax regime may cause difficulties.
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Special rules apply to capital allowances on ships owned by UK businesses which do not elect to enter the tonnage tax regime.
We have extensive experience in advising on transactions in the shipping sector, including buying and selling ships, and shipping companies, and flotations.
A common issue for shipping companies is withholding tax on interest payments to overseas banks. It may be possible to obtain clearance to make interest payments gross.
Working with our international network we advise on the shipping tax position of other jurisdictions, such as Singapore, Greece, and other European tonnage tax regimes.
US freight tax
Foreign ship owners and operators are liable to tax at 4% on 50% of their gross US transportation income relating to international voyages where the ship docks at a US port.
Please get in touch to discuss how we can help you and your business.