CYPRUS Trends and Developments Contributed by: Adam Montanios and Nicolas Montanios, Montanios & Montanios LLC
Shipping Deputy Ministry to the President The Cypriot government established the Ship - ping Deputy Ministry in 2018, to expand the functions and capacity of the former Department of Merchant Shipping, which was one of many departments of the Ministry of Transport, Com - munications and Works. The establishment of a dedicated and autonomous Deputy Ministry focusing entirely on the Cypriot maritime indus - try has been a great success and signalled the government’s dedication to the shipping cluster, which accounts for 7% of the country’s GDP. The Shipping Deputy Ministry has further enhanced its already excellent level of offered services, and now offers a 24/7 service from maritime special - ists in seven maritime offices around the globe. The Shipping Deputy Ministry has also recently introduced its new vision and philosophy for Cypriot shipping. The current Deputy Minister, Mrs Marina Hadjimanolis, along with her pre - decessors Mrs Natasa Pilides and Mr Vassil - ios Demetriades, have worked tirelessly and extremely efficiently in developing a distinct and leading identity for the newly formed Shipping Deputy Ministry. The overarching aim of the Shipping Deputy Ministry is to maintain and develop Cyprus as a significant and influential actor, spearheading positive change in global shipping. Additionally, it strives to promote Cyprus as an attractive international maritime centre, focusing on sus - tainable growth and excellence. The Shipping Deputy Ministry has implemented its national strategy towards a green and digital future, titled “Sea Change 2030”. This strategy introduces a new philosophy to the way Cyprus approaches shipping, and consists of a pro - gramme of 35 sustainable actions with a strict
timeframe for their implementation. Its primary objectives include: • bolstering the resilience of Cyprus’s shipping sector in times of crisis; • enhancing its competitiveness; and • positioning it as a prominent player in the global maritime arena. This programme is widely recognised by the local shipping cluster as quite realistic in its implementation – evidenced by the fact that, at the time of writing, most of the proposed actions have already been implemented. Prolonging of the Tonnage Tax System The Cyprus Tonnage Tax System (TTS) was orig - inally approved by the European Commission in 2010 for an initial ten-year period, as compatible with the requirements of the EU acquis and in line with the guidelines on state aid to maritime transport. Prior to the expiry of this initial period, the Ship - ping Deputy Ministry – in co-operation with other government departments and the private ship - ping industry – achieved a smooth and success - ful prolongation of the Cyprus TTS for another ten years (up to December 2029). According to the scheme, it is possible for the following to be taxed (under certain conditions particular to each category) under the TTS and to therefore be subject to an annual tax (referred to as tonnage tax) in lieu of income or corporate tax. • qualifying owners of Cyprus-flagged vessels; • qualifying owners of foreign-flagged ships;
• charterers; and • ship managers.
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