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SCHEDULE 22
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TONNAGE TAX |
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PART I |
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INTRODUCTORY |
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Tonnage tax |
| | 1. - (1) This Schedule provides an alternative regime ("tonnage tax") for calculating the profits of a shipping company for the purposes of corporation tax.
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(2) The regime applies only if an election to that effect (a "tonnage tax election") is made (see Part II of this Schedule).
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Companies that are members of a group must join in a group election.
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(3) A tonnage tax election may only be made if-
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(a) the company or group is a qualifying company or group (see Part III of this Schedule), and |
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(b) certain requirements are met as to training (see Part IV of this Schedule) and other matters (see Part V of this Schedule). |
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Tonnage tax companies and groups |
| | 2. - (1) In this Schedule a "tonnage tax company" or "tonnage tax group" means a company or group in relation to which a tonnage tax election has effect.
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(2) References in this Schedule to a company entering or leaving tonnage tax are to its becoming or ceasing to be a tonnage tax company.
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References to a company being subject to tonnage tax have a corresponding meaning.
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Profits of tonnage tax company |
| | 3. - (1) In the case of a tonnage tax company, its tonnage tax profits are brought into charge to corporation tax in place of its relevant shipping profits (see Part VI of this Schedule).
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(2) Where profits would be relevant shipping income, any loss accruing to the company is similarly left out of account for the purposes of corporation tax.
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Tonnage tax profits: method of calculation |
| | 4. - (1) A company's tonnage tax profits for an accounting period are calculated in accordance with this paragraph by reference to the net tonnage of the qualifying ships operated by the company.
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For the purposes of the calculation the net tonnage of a ship is rounded down (if necessary) to the nearest multiple of 100 tons.
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(2) The calculation is as follows:
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| Step One |
Determine the daily profit for each qualifying ship operated by the company by reference to the following table and the net tonnage of the ship:
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For each 100 tons up to 1,000 tons |
£0.60 |
For each 100 tons between 1,000 and 10,000 tons |
£0.45 |
For each 100 tons between 10,000 and 25,000 tons |
£0.30 |
For each 100 tons above 25,000 tons |
£0.15 |
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| Step Two |
Work out the ship's profit for the accounting period by multiplying the daily profit by-
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(a) the number of days in the accounting period, or |
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(b) if the ship was operated by the company as a qualifying ship for only part of the period, by the number of days in that part. |
| Step Three |
Follow Steps One and Two for each of the qualifying ships operated by the company in the accounting period.
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| Step Four |
Add together the resulting amounts and the total is the amount of the company's tonnage tax profits for that accounting period.
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Tonnage tax profits: calculation in case of joint operation etc. |
| | 5. - (1) If two or more companies fall to be regarded as operators of a ship by virtue of a joint interest in the ship, or in an agreement for the use of the ship, the tonnage tax profits of each are calculated as if each were entitled to a share of the profits proportionate to its share of that interest.
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(2) If two or more companies fall to be treated as the operator of a ship otherwise than as mentioned in sub-paragraph (1), the tonnage tax profits of each are computed as if each were the only operator.
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Measurement of tonnage of ship |
| | 6. - (1) References in this Schedule to the gross or net tonnage of a ship are to that tonnage as determined-
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(a) in the case of vessel of 24 metres in length or over, in accordance with the IMO International Convention on Tonnage Measurement of Ships (ITC69); |
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(b) in the case of a vessel under 24 metres in length, in accordance with tonnage regulations. |
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(2) A ship shall not be treated as a qualifying ship for the purposes of this Schedule unless there is in force-
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(a) a valid International Tonnage Certificate (1969), or |
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(b) a valid certificate recording its tonnage as measured in accordance with tonnage regulations. |
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(3) In this paragraph "tonnage regulations" means regulations under section 19 of the Merchant Shipping Act 1995 or provisions of the law of a country or territory outside the United Kingdom corresponding to those regulations.
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