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PR(03)17: EFTA Surveillance Authority clears amendments to the aid scheme “Norwegian Special Tax Regime for Shipping Companies” (“Tonnage tax”)


The EFTA Surveillance Authority decided on 16 July 2003 not to raise objections to amendments to an existing aid scheme “Norwegian Special Tax Regime for Shipping Companies”.

The initial special tax regime for shipping companies was authorized by the Authority’s decision dated 1 July 1998. The aid scheme was assessed on the basis of the special rules that apply to State Aid to the maritime transport sector[1].

The special tax regime 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 financial income.  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. As a part of the scheme, a number of different and elaborate ring-fencing mechanisms were adopted to avoid spillover effects into other sectors.

Subsequent to the Authority’s decision in 1998 the tonnage tax rates have been doubled twice, after which a sliding scale for environmentally based reductions up to 25 per cent and then, as from 2002, a general reduction of 30 per cent of the tax rates were adopted.

In addition, some of the ring-fencing mechanisms have been subject to modifications since the authorisation of 1998.

The amendments to the scheme do not, in the Authority’s view, alter the assessment regarding the compatibility of the aid scheme. Therefore, the Authority has concluded that the amended “Norwegian Special Tax Regime for Shipping Companies” aid scheme qualifies for exemption under Article 61(3) (c) of the EEA Agreement.

For further information, please contact Mr. Amund Utne on tel. +32 2 286 18 50.

17 July 2003

[1] Chapter 24A, Aid to maritime transport, of the Procedural and Substantive Rules in the Field of State Aid (State Aid Guidelines), adopted and issued by the EFTA Surveillance Authority on 19 January 1994.

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