CYPRUS Trends and Developments Contributed by: Adam Montanios and Nicolas Montanios, Montanios & Montanios LLC
Abolition of Vessel Registration Fees and Mortgage Fees/Simplification and Streamlining of Fees The Shipping Deputy Ministry has abolished government fees for the registration of a vessel under the Cyprus flag, as well as fees for the registration at the Register of Cyprus Ships of a mortgage as an encumbrance on a Cyprus- flagged vessel. In another attempt to simplify matters relating to the services provided by the Shipping Deputy Ministry, all fees and dues relating to ocean- going commercial Cyprus-flagged vessels are being streamlined and simplified. Technical Standards The Shipping Deputy Ministry has established technical requirements for certain categories of vessels below 500 gross tons (GT) with respect to their registration in the Register of Cyprus Ships and their operation under the Cyprus flag. The purpose of such technical standards is to specify certain technical requirements for such vessels (including yachts and mega-yachts) in areas not covered up to that date by national, EU or international legislation. In particular, these standards are applicable to the following categories of vessels: • Category A – cargo ships of more than 24 metres in load line length and below 500 GT; • Category B – motor or sailing vessels used for pleasure and engaged in trade, of more than 24 metres in load line length and below 500 GT, carrying up to 12 passengers; • Category C – motor or sailing vessels used for pleasure and not engaged in trade, of more than 24 metres in load line length and below 500 GT, carrying up to 12 passengers; and
This is calculated based on the net tonnage of the qualifying ships that such persons (physical or legal) own, charter or manage. The following physical or legal persons are eligi - ble for the Cyprus TTS. • An owner of a Cyprus-flagged ship who owns a qualifying ship engaged in a qualifying shipping activity (and who automatically falls within the TTS’s scope). • An owner of a foreign ship who owns a quali - fying ship engaged in a qualifying shipping activity, and who: (a) is a tax resident of Cyprus; (b) has opted to be taxed under the TTS; and (c) complies with the “community-flagged share” requirement. • A charterer who charters a qualifying ship engaged in a qualifying shipping activity under bareboat, demise, time or voyage char - ter, and who: (a) is a tax resident of Cyprus; (b) has opted to be taxed under the TTS; and (c) complies with the “minimal share of the fleet in ownership – percentage of chartered-in ships” and the “community- flagged share” requirements. • A ship manager who provides ship manage - ment services (crewing and/or technical) to a qualifying ship, and who: (a) is a tax resident of Cyprus; (b) has opted to be taxed under the TTS; (c) maintains a fully fledged office in Cy - prus employing sufficient (in number and qualifications) personnel, at least 51% of whom are EU/EEA citizens; and (d) complies with/satisfies the “community- flagged share” requirement as well as a number of additional requirements.
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