Ship management : developing a new legal framework

Abstract

Ship management is widespread with ship managers forming an integral part of the shipping industry. The European Commission eventually became aware of the size of the ship management business and its importance in contributing to the Community's maritime sector. The European Commission subsequently issued State aid Guidelines in 2004 which were later followed by a Communication in 2009. These instruments allow Member States to offer beneficial fiscal measures, namely tonnage tax, to ship managers. Influenced by both the Guidelines and the Communication, amendments were made to the local tonnage tax regulations in February 2010. The amendments represent the first instance under Maltese law where ship managers, subject to a number of conditions, may opt to pay tonnage tax to the exclusion of the standard corporate tax. These amendments have added substance to the Maltese legal framework on ship management by creating an attractive fiscal regime for ship managers. Furthermore, the amendments were introduced with the aim of attracting ship managers to Malta, with the ultimate object of establishing Malta as a competitive ship management centre. Unfortunately, the amendments have yet to reap any results. The crux of this thesis lays in the discussion on Malta's legal framework on ship management and on the formation, operation, regulation and taxation of ship managers. Furthermore, Cypriot legislation on the taxation of ship managers is analysed and compared to the local tonnage tax regulations on the matter. Moreover, the subject of ship management per se as well as the place of ship management in the European Union's policy on State aid with respect to maritime transport and industry is examined.