Greek Shipowner TaxGreek shipowners have agreed to extend a voluntary tax contribution to the Greek government, which I previously blogged about, for an additional year due to the fact that Greece is still struggling with its debt crisis. Members of the Union of Greek Shipowners (UGS) approved the extension of the agreement for the voluntary tax payments, which was originally signed in 2013 and was set to expire at the end of 2017. The current measure will extend the agreement with the Greek state until the end of 2018.

In 2013 it was agreed that shipowners would make a total of $530 million in contributions, in addition to the tonnage tax which they are already required to pay along with other taxes, over a four year period. We will wait and see if this generous voluntary contribution will help the Greek government achieve its fiscal targets.

Joanne Mantis Attorney New Orleans

Guest blogger Joanne Mantis is a multilingual attorney in the New Orleans office of King, Krebs & Jurgens. She is admitted to both the Louisiana and Greek Bar, and represents a variety of clients both domestically and internationally. 

 

Greek Shipowners Consider Exodus
Greek shipowners facing proposed higher taxes due to the Greek financial crisis are considering an exodus from the country, which would be a blow to the economy and Greek ports such as the Port of Piraeus, pictured above.

The Greek shipping industry will have to sustain additional taxes according to a proposed bailout agreement. Greek shipowners already agreed to voluntarily pay an additional tonnage tax from 2014-2017 to help the embattled economic crisis. However, the Greek government says that isn’t enough and plans to further increase the tonnage tax (a flat annual rate based on a ship’s capacity), and will also cut other tax advantages that have been accorded to shipowners for years.

Greek shipowners are therefore having to weigh their options, and many state that if these measures are enacted they will have to consider relocating to other shipping-friendly places such as Cyprus, London, Singapore and Dubai. In fact, Hong Kong, Singapore, London and Cyprus have sent delegations to lobby disgruntled shipowners. Cyprus has had the most success by recently luring 42 Greek shipping companies to their country. The Central Bank of Cyprus stated that revenues from shipping have increased 9.3% (approximately $491 million) in the past year.

Greece’s unemployment rate is now above 25%, and the Greek shipping industry currently employs about 200,000 people, representing about 3.5% of the country’s workforce. The shipping industry makes up about 7.5% of the already dwindling Greek economy. It is anticipated that the continued exodus of Greek shipowners would cause a blow to the industry and to the economy as a number of people would lose their jobs.

New Orleans Attorney Joanne Mantis


Guest blogger Joanne Mantis is a multilingual attorney in the New Orleans office of King, Krebs & Jurgens. She is admitted to both the Louisiana and Greek Bar, and represents a variety of clients both domestically and internationally. She has previously blogged for Offshore Winds regarding the Greek Tonnage Tax.

Greek Offshore Hydrocarbon Bid MapGreece has initiated its tender process for offshore oil and gas (hydrocarbons) exploration as of August 26, 2014. The Greek Ministry of Environment, Energy and Climate Change is seeking bid applications for its offshore oil and gas exploration in 20 block areas in the Ionian Sea and south of Crete. The Greek government is hoping this will aid the Greek economy by encouraging an influx of investment capital.

Greece is utilizing a licensed-based system where applicants will have to acquire certain licenses in order to qualify as operators. Successful bidders will be awarded exploration and development rights for a primary term of eight years which will be subject to extensions. The Greek government has made several concessions with the objective of making the process more attractive to investors and international oil and gas companies. Paramount among these is a substantial decrease in its corporate tax rate from 40% to 25%. The 25% consists of a 20% income tax and a 5% regional tax.

The submission deadline ends six months after the date of initial publication (August 26, 2014), which will be February 27, 2015. The Ministerial Decree calling for tenders is available online.

New Orleans Attorney Joanne Mantis


Guest blogger Joanne Mantis is a multilingual attorney in the New Orleans office of King, Krebs & Jurgens. She is a member of both the Louisiana and Greek Bar, and represents a variety of clients both domestically and internationally. She has previously blogged for Offshore Winds regarding the Greek Tonnage Tax.

 

Greece has finally imposed a tonnage tax on foreign-flagged vessels operated by shipping companies in Greece. It already had been taxing Greek-flagged ships, and the nation’s debt crisis left the government with no other choice than to tax foreign-flagged ships in an attempt to help raise its revenues. The government is hoping it will raise at least $106 million from the levy.

The Greek state is targeting an estimated 762 managers with the new laws, which went into effect as of January 2013. Fortunately, ship owners and management companies’ ship earnings are excluded from the tax, as it only applies to the tonnage of their ships.

The Greek Ministry of Finance has issued the following guidelines as to who is liable for this new tax and how to calculate it:

  • The tax is levied on ships managed by companies in Greece which own foreign-flagged vessels.
  • The tax will be calculated using the gross tonnage of the vessel and the age of the vessel.
  • The tax will be calculated in U.S. Dollars and converted into and paid in Euros.
  • The foreign ship owner and the ship management office will be jointly liable for payment of the tax.
  • The responsibility for filing the tax return lies with the ship owner, the ship manager and their representatives or their attorneys-in-fact.
  • The annual return must be filed by the end of February for the previous calendar year; 25% of the tonnage tax assessed must be paid at the time the return is filed (February) with the remaining 75% paid in three equal installments due in June, September, and December.

The first year the tax was implemented was for 2012, meaning to be in compliance with the new law, 2012 taxes should have been filed by the end of this past February, with additional payments made in June, this month and in December 2013. Ship owners or ship managers that have not yet filed their 2012 tonnage tax will accrue a 1.5% monthly penalty fee (interest) which will be added to their outstanding taxes for filing untimely. If Greek authorities feel that an owner cannot pay his taxes, they could revert to arresting the vessel, but this extreme measure is unlikely to be implemented. Those needing further guidance should contact their attorney and accountant.

The Union of Greek Ship Owners (EEE) informed its members that it had reached an agreement with the government to implement an extraordinary additional voluntary contribution to the tonnage tax, in addition to the mandatory amount owed, for the next three years. This voluntary tax applies to Greek-owned shipping companies, whether they have Greek- or foreign-flagged ships. This contribution is voluntary, but the Union hopes that many ship owners will participate to help increase the government’s revenues.

New Orleans Attorney Joanne Mantis

Guest blogger Joanne Mantis is an attorney in the New Orleans office of King, Krebs & Jurgens. She is a member of both the Louisiana and Greek Bar, and represents a variety of maritime clients both domestically and internationally.