Greek shipowners to pay taxes under new deal

Greek shipowners will pay taxes on their vessels registered abroad the first time in decades although their other fiscal advantages will remain unchanged, a source from the Merchant Marine Ministry said on Friday. An agreement between the government and the shipowners that will be part of the new tax bill the Greek parliament is expected to approve late on Friday night will alter a fiscal system virtually unchanged since 1955 said the source. According to the new provision, the tonnage tax currently in force for the Greek merchant fleet will now apply to "foreign shipowners or companies for ships sailing under foreign flags that are managed by companies based in Greece." According to the same source, a large part of the Greek fleet sailing under foreign flags falls under this category. Authorities are hoping that the new provision will not result in companies fleeing the country, as the tax imposed on the new contributors will be relatively small. The ministry was not able to give an estimate of the money expected to be collected, while the fiscal contributions of the entire sector have remained unknown for some time. According to sources, revenue from the tax should be around 100 million euros ($133.4 million) per year. Greek shipowners are leaders in their sector internationally, but only nearly a third of their fleet sails under the Greek flag. In a country that is entering a sixth year of continuous recession and is implementing major spending cuts, Greek shipowners have often been a source of resentment because of their privileged fiscal status. Greek shipowners are also exempt from paying tax on profits generated by their Greek-flagged vessels, paying only the tonnage tax.