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Economic framework conditions
The Danish International Register of Shipping (DIS) together with the tonnage tax scheme and the special tax scheme for seafarers constitute the main elements of the framework conditions that are to ensure the international competitiveness of the Danish merchant fleet.
The Danish tax schemes are based on the EU guidelines on state subsidies to maritime transport. The purpose of the guidelines is to ensure the international competitiveness of the Danish and European fleets and to secure and develop the necessary maritime competencies on which the entire maritime cluster depends.
Good framework conditions help secure a merchant fleet under Danish flag as well as the maritime competencies that are a consequence hereof. Without the ships, it would not be possible for Denmark to maintain the maritime cluster. While about 12-14,000 persons are employed on board the ships, about 80,000 persons are employed within the entire maritime cluster (about 6 per cent of the labour force in the private sector in Denmark). The incomes of shore-based employees in the shipping companies are above average.
The DIS tax scheme
The DIS tax scheme makes it possible for Danish shipowners to limit their manning costs to an internationally competitive level since the seafarers’ wages are tax-free and are, consequently, paid as net wages. On the world market, manning costs are some of the expenses that differ from one flag State to another, and consequently they are an important parameter of competitiveness.
Ships registered in DIS have a high percentage of Danish seafarers. The Act on the Danish International Register of Shipping makes it possible for persons who are considered domiciled in Denmark according to EU law to be compared to persons domiciled in Denmark and, consequently, to be covered by collective agreements concluded with Danish trade unions. The provisions on rest hours, holidays, etc. must be in accordance with Danish law regardless of the seafarer’s nationality or place of residence.
The tonnage tax scheme
The basis of the taxation of the part of the income in a shipping company that it is taxable under the tonnage tax scheme is not income minus expense, but on the other hand the size of the tonnage covered by the scheme. The tonnage tax scheme serves to ensure predictability of taxation both for the industry and for the State.
The taxable income is calculated on the basis of the scale below per 100 net tonnes (NT) per 24 hours or part hereof, regardless whether each individual ship is engaged on voyages or not. The scale corresponds to the level of other countries’ tonnage tax schemes.
1. Up to and including 1,000 NT – 8,97 DKK per 100 NT
2. From 1,001 NT up to and including 10,000 NT – 6,44 DKK per 100 NT
3. From 10,001 NT up to and including 25,000 NT – 3,85 DKK per 100 NT
4. More than 25,000 NT – 2,53 DKK per 100 NT
The amount reached by using this scale constitutes the shipping company’s taxable income of the part of the company’s business covered by the tonnage tax scheme. This income is taxable by the corporate tax rate (at the moment 25 per cent).
International work
In the EU, the Danish Maritime Authority strives to ensure that the framework conditions of the Danish shipping industry remain up-to-date in relation to worldwide market conditions and contribute in a satisfactory way to securing the global competitiveness of the European fleet as well as the necessary maritime competencies.
At the same time, the Danish Maritime Authority tries to ensure that the EU principles of free and fair competition are implemented so that the European shipping industry has a clear picture of the economic framework conditions and a possibility of adjusting to changes in them. More specifically, it may concern how the shipping companies can cooperate on, for example, large terminal projects and exchange information without limiting competition.
Please refer to the section on the Danish Maritime Authority’s efforts to ensure open and unrestricted access to worldwide transport markets.
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