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State Aid

PR(09)51: Icelandic maritime transport schemes found to be incompatible with the EEA Agreement


The Authority has today closed its investigation into two schemes, a tonnage tax scheme and a refund scheme for the employment of seafarers, which had been notified by Iceland in the field of maritime transport. The Authority concluded that both schemes entail state aid measures which are incompatible with the EEA Agreement.

No recovery provisions are, however, necessary as the Icelandic authorities have indicated that no ship owner has applied for aid under either of the schemes and therefore no payments have been made.

The tonnage tax scheme was an exemption regime under which shipping income would have been tax exempt on a permanent basis. Instead of paying corporate tax on profit generated by eligible maritime activities, eligible undertakings would have paid a tonnage tax directly to the tonnage operated. Such tax would have been payable irrespective of the company's actual profit or losses. The Authority considered that this scheme was incompatible with the EEA Agreement because of the obligation for the ship owner to register ships in the Icelandic International Ship Register, the tonnage tax rates which were lower than in other EEA States, and the duty to remain within the scheme for a duration shorter than in other EEA States.

The refund scheme for the employment of seafarers was a gross wage support system for seafarers by which ship owners could have claimed grants amounting to 90% of the income tax calculated on the gross wages of the employed seafarers. The Authority considered that the scheme was incompatible with the EEA Agreement because of the requirement that the ships be registered in the Icelandic International Ship Register and because it was not clear that the condition that aid be only given in relation to the employment of EEA seafarers for scheduled passenger services between ports of the EEA would be met.

For further information, please contact:

Marianne Clayton
Senior Officer
Competition and State Aid Directorate
tel. (+32)(0)2 286 18 23


Brussels, 8 July 2009

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