The concept of Shipping Organisation is a mechanism that was introduced by Maltese law allowing local and international ship owners to benefit from various local tax incentives, on top of ensuring accessibility to the Malta Ship Register, which has established itself as a leading maritime centre and is now the largest registry in the European Union and the seventh largest in the world.
Both local and foreign corporate bodies can qualify as Shipping Organisations under Maltese law on condition that they execute one of the activities specified at law, namely the ownership, operation, administration and management of a Maltese ship. No restrictions are set on the type of shipping organisation, albeit the most common structure is a limited liability company. In case of foreign corporate entities, they must enjoy legal personality in accordance with the law under which they were established.
Once the entity’s activity is ascertained and recognised, a Shipping Organisation is eligible to opt for the Tonnage Tax regime as opposed to taxation under the local Income Tax rules. The Shipping Organisation must further prove that the ship can be qualified as a Tonnage Tax Ship and that the income to be taxed is derived from shipping activities. One final condition is the payment of applicable registration fees and the relative tonnage tax.
Unlike other tonnage tax regimes proposed in other jurisdictions, there is still no obligation on a Maltese Shipping Organisation to subject all its ships to the same tax regime. Hence, a shipping organisation has the liberty to choose between the two local tax regimes (that is the Tonnage Tax and Income Tax regimes) for every ship that it owns, depending on what is more beneficial.
The concept of Shipping Organisation is a mechanism that was introduced by Maltese law allowing local and international ship owners to benefit from various local tax incentives, on top of ensuring accessibility to the Malta Ship Register, which has established itself as a leading maritime centre and is now the largest registry in the European Union and the seventh largest in the world.
Both local and foreign corporate bodies can qualify as Shipping Organisations under Maltese law on condition that they execute one of the activities specified at law, namely the ownership, operation, administration and management of a Maltese ship. No restrictions are set on the type of shipping organisation, albeit the most common structure is a limited liability company. In case of foreign corporate entities, they must enjoy legal personality in accordance with the law under which they were established.
Once the entity’s activity is ascertained and recognised, a Shipping Organisation is eligible to opt for the Tonnage Tax regime as opposed to taxation under the local Income Tax rules. The Shipping Organisation must further prove that the ship can be qualified as a Tonnage Tax Ship and that the income to be taxed is derived from shipping activities. One final condition is the payment of applicable registration fees and the relative tonnage tax.
Unlike other tonnage tax regimes proposed in other jurisdictions, there is still no obligation on a Maltese Shipping Organisation to subject all its ships to the same tax regime. Hence, a shipping organisation has the liberty to choose between the two local tax regimes (that is the Tonnage Tax and Income Tax regimes) for every ship that it owns, depending on what is more beneficial.