9 July 2012
The UK tax authorities have asked the European Commission (EC) to comment on whether anchor handling tugs supply (AHTS) vessels should be regarded as tugs and therefore must be flagged under an EU flag in order to qualify for UK tonnage tax, or whether the more general EU flagging rules apply.
The EC has now given its opinion that, on the basis of information put to it, the characteristics and activities of AHTS vessels are closer to those of a maritime transport vessel than of a tug boat and therefore there is no strict EU flag link. This is on the basis that only a small percentage (less than 10%) of AHTS vessels’ activities constitute towage activities, and such ships are not in competition with tug boats. The EC further commented that AHTS vessels share more business features with maritime transport as their services are necessarily provided at sea and they face challenges similar to those faced by maritime transport in terms of global competition.
This is very good news for companies affected by the decision. More generally, it is very encouraging that the EC seems to be fully aware of, and sympathetic to, challenges faced by maritime transport in terms of global competition.
For further information please contact Sue Bill.