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PR(98)11: EFTA Surveillance Authority authorises aid to the Norwegian shipping sector


The EFTA Surveillance Authority has decided to authorise a package of tax-related State aid measures in favour of ship operating companies in Norway.  The measures consist of partial rebates to shipping companies in respect of the income tax and social security tax paid by seafarers and a preferential tax treatment of shipping companies.

According to the refund schemes for seafarers’ employment and training, owners of qualifying ships can receive grants in respect of seafarers who are liable for taxation in Norway.  As from the second half of 1998, the employment grants amount to 12% of gross wages.  Supplementary grants may be paid in respect of trainees on board qualifying ships.  In 1998, the total budget allocation for the refund schemes is NOK 415,2 million.

The special tax regime for shipping companies is an option for companies, whose sole activity is ownership or leasing of ships.  It exempts such companies from regular corporate tax on profits derived from shipping, as long as the profits are retained in companies within the scheme.  The exemption does not apply to interest, profits from net share trading, or income from other sources.  Companies qualifying for the scheme are required to pay a so-called tonnage tax calculated on the basis of the size of the ships which they operate.

The aid schemes were assessed on the basis of guidelines on aid to the maritime sector adopted by the Authority in July 1997, corresponding to similar guidelines adopted by the EC Commission in April 1997.

The refund schemes for employment and training of seafarers pursue objectives recognised in the guidelines on aid to maritime transport, namely to safeguard and increase employment of EEA seafarers, to secure recruitment and qualified training of seafarers, and to improve the competitive position of companies employing such seafarers.  The refund schemes were found to meet the relevant conditions of the guidelines.

The objective of the special tax arrangement for shipping companies is to enhance the competitiveness of the EEA-based shipping sector in the global market, in the face of competition from operators based in third countries offering a virtually tax-free environment and high degree of freedom with respect to manning and safety requirements.  The scheme was found to meet the relevant conditions for such aid in the Authority’s guidelines on aid to the maritime transport sector.

In order to monitor further how the aid schemes contribute to their intended objectives and that the relevant conditions continue to be met, the Authority has requested the Norwegian authorities to submit annually detailed specific reports on the operation of the aid schemes.

For further information please contact Mr. Amund Utne on tel. 286.18.50 or Mr. Gudlaugur Stefansson (Competition and State Aid Directorate).

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