Sweden plans tonnage tax from 1 July 2016

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Kari Reinikainen

 

08 September 2015

The Swedish government plans to introduce tonnage tax next year after more than a decade of lobbying by the country's shipowner community.

"In the Budget Bill for 2016, which is based on an agreement between the government parties and the Left Party, the government will propose the introduction of a Swedish maritime tonnage tax system. The purpose is to give Swedish shipping companies in international traffic competitive conditions equal to those of shipping companies in other European countries," the government said in a statement.

"I am pleased that we will have a maritime tonnage tax system in place and I look forward to seeing more Swedish-flagged ships. We know that this is very important in terms of jobs and it is a step along the way to achieving the lowest rate of unemployment in the European Union by 2020," said Minister for Infrastructure Anna Johansson in the statement.

The initiative will be funded within the infrastructure appropriations, half within the shipping industry. This will be done by adjusting maritime support and by subjecting to interest the accumulated excess depreciation of shipping companies when they enter the system.

Maritime tonnage tax is state support, which must be reported to and approved by the European Commission before being implemented. Therefore, the earliest date on which the new provisions can enter into force is 1 July 2016.

The purpose is to give Swedish shipping companies in international traffic competitive conditions equal to those of shipping companies in other European countries, the government concluded.

Anders Boman, chairman of the Swedish Shipowners' Association (SSA) said he is very pleased with the tax proposal from the government, "With the clear signals the government is now providing, we hope that our member companies can accommodate future for Swedish shipping. There is a great potential that we must seize."

Foreign observers have noted that in Sweden, which has a stronger industrial base than its Scandinavian neighbours, the shipping community has faced an uphill struggle to convince politicians that the industry needs a different tax treatment than other businesses in the country.

The absence of tonnage tax has resulted in the departure of many companies from the country and several others have flagged out their vessels, mostly to Denmark, the United Kingdom and the Netherlands.

In the mid-1990s, Sweden was a major maritime nation and Stockholm bourse a major shipping market; Frontline, ICB Shipping, Nordstrom & Thulin, Argonaut, Bylock & Nordsjofrakt and Concordia Maritime were among the companies listed there. Today, of these only Concordia remains. Two decades ago, most of the ships owned by Swedish companies flew foreign flags.