The new bailout deal between the Greek government and creditors includes measures in which Greece’s shipping industry will also be subjected to tax rises.
Among other measures, tonnage tax – for ships with Greek and foreign flags – will increase by 4% annually, for the four-year period 2016-20. This tax increase is just a small part of a giant bill covering reforms and tax increases for most aspects of the country’s economy.
In addition, the new law includes reduction in tax rates for foreign exchange brought to Greece by foreign companies exclusively engaged in insurance arrangements, chartering, brokerage, and shipbuilding. Excluded from this regulation are passenger ferries and cargo ships of domestic routes.
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International creditors have forced Athens to implement higher taxes on the shipping industry, an action the Greek government has been reluctant to do for fear of shipping companies fleeing Greece. However, circles in the Greek shipping market estimate that the tonnage tax is not expected to cause any major problems at present.
Theodore Veniamis, president of the Union of Greek Shipowners, has repeatedly stated that any change in the existing tax regime will force owners to seek a friendlier tax environment abroad.
However, Veniamis mainly referred to tax benefits Greek shipowners enjoy, such as no taxes on profits from shipping operations, or ship sales. These benefits are currently in the country’s constitution and changing them would require a two-thirds majority in parliament.