Tonnage Tax: shipping companies
Paying Corporation Tax if you manage your ships from the UK and they weigh 100 tons or more.
You may opt to pay Corporation Tax on a fixed notional profit, calculated on the net tonnage of your ships, instead of your actual profits from your shipping activities.
You may be able to elect to pay Tonnage Tax if:
- you’re a qualifying company
- you have qualifying ships
- you meet certain obligations to train seafarers
Elect to use Tonnage Tax
You can elect to use Tonnage Tax but you must sign up for a minimum of 10 years.
You can make a renewal election on a rolling basis to extend the original election.
Ships registered outside the EU or EEA member states
If you start to operate a qualifying ship after electing into Tonnage Tax, you must carry out a flagging test to decide if your ship qualifies.
You don’t need to carry out the flagging test if the financial year is excepted.
You must always register tugs and dredgers in an European Union (EU) / European Economic Area (EEA) member state to qualify for Tonnage Tax.
Providing all other conditions are met your ship will qualify for Tonnage Tax if the financial year it’s operated in is an ‘excepted year’.
HM Revenue and Customs (HMRC) will test the tonnage of Tonnage Tax ships on EU/EEA member states registers, as a proportion of Tonnage Tax ships registered worldwide. As long as this proportion has not fallen from the previous year’s calculation, HM Treasury (HMT) will designate that financial year as an ‘excepted year’.
The financial years 2005, 2006 and 2007 are excepted years.
No years from 1 April 2008 to 31 March 2017 have been excepted.
Find detailed guidance in the Tonnage Tax Manual.
You can contact the HMRC Tonnage Tax technical adviser:
Telephone: 03000 568532