EY 2013 Shipping Industry Almanac

Shipping IndustryAlmanac2013

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=jfklQgmf_j]^]jklgl`]_dgZYdgj_YfarYlagfgê]eZ]jjekg^=jfklQgmf_?dgZYdDaeal]\$]Y[`gôà[àkYk]hYjYl]d]_Yd]flalq&=jfklQgmf_?dgZYdDaeal]\$YMC[gehYfqdaeal]\Zqguarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com.

*()+=Q?EDaeal]\&All Rights Reserved.

Table of contentsIntroduction iAustralia 1Barbados 23Belgium 29Brazil 45Canada 61China 77Curaao 89Cyprus 95Denmark 101Dominican Republic 109Egypt 121Estonia 125Finland 133France 139?]jeYfq ),1?j]][] )-1@gf_Cgf_ ).1India 177Indonesia 191Ireland 199Akd]g^EYf *(1Italy 219Japan 227Dmp]eZgmj_ *++EYdYqkaY *,/EYdlY *--E]pa[g *.-The Netherlands 273New Zealand 285Norway 295Oman 305Panama 315Philippines 331Portugal 353Qatar 359Russia 373Singapore 389South Africa 399Spain 407KjaDYfcY ,)-Sweden 421Taiwan 427Thailand 435Turkey 441Mfal]\9jYZ=eajYl]k ,-)Mfal]\Caf_\ge ,-1Mfal]\KlYl]kg^9e]ja[Y ,.1Ernst & Young shipping industry network 475

Shipping Industry Almanac 2013

The Shipping Industry Almanac is published annually by Ernst & Youngs shipping industry network, which comprises more than 100 shipping]p][mlan]k^jge=jfklQgmf_e]eZ]jjekafgn]j-([gmflja]karound the globe.

The Shipping Industry Almanac has been keeping our clients and friends af^gje]\Yf\mh\Yl]\^gjl`]dYkl).q]Yjkkaf[]gmjjkl]\alagfaf)110&Alprovides a valuable overview of the current investment climate for shipping companies in 47 countries worldwide.

A directory of Ernst & Young shipping professionals across our four service lines of assurance, tax, transactions and advisory is included, and highlights our in-depth local knowledge and our global reach.

The information published in this Almanac was researched and compiled by Ernst & Young professionals in the countries concerned. Each country chapter covers the following subjects: tax, human capital, corporate structure, grants and incentives as well as general information, such as registration requirements.

The content is based on information current as of 1 January 2013, unless otherwise indicated.

For more information, please visit us on ey.com or contact us at]qk`ahhaf_&_jgmh8]q&[gegj[Yddqgmjdg[Yd=jfklQgmf_g^[]&

This publication contains information in summary form and is thereforeintended for general guidance only. It is not intended to be a substitute fordetailed research or the exercise of professional judgment. Neither=Q?EDaeal]\fgjYfqgl`]je]eZ]jg^l`]_dgZYd=jfklQgmf_organization can accept any responsibility for loss occasioned to anyperson acting or refraining from action as a result of any material in thishmZda[Ylagf&GfYfqkh][a[eYll]j$j]^]j]f[]k`gmd\Z]eY\]lgl`]appropriate advisor.

Introduction

i


Australia1. Tax1.1 Income tax treatment of shipping companies 1.1.1 Australian domestic tax law

Shipping companies are subject to the general tax laws of Australia, including income tax, goods and services lYp$klYeh\mlqYf\]ehdgqe]fl%j]dYl]\lYp]k af[dm\af_^jaf_]Z]f]lklYp$hYqjgddlYpYf\kmh]jYffmYlagf$i.e., compulsory pension).

Subject to the following comments, shipping companies operating in Australia generally pay tax at the rate of 30% of taxable income. Australian tax resident companies include worldwide income in their taxable income. Non-Australian tax resident companies include only income derived from sources in Australia. The source g^kh][a[af[ge]\]h]f\kgfl`]af\ana\mYd^Y[lkYf\[aj[meklYf[]kg^]Y[`[Yk]Yf\j]da]kgfYjYf_]of factors, including the place of execution of contracts, where the services are performed, and where the remuneration is payable. Where a non-Australian resident shipping company operates by way of leasing ]imahe]fl a&]&$YZYj]ZgYl[`Yjl]j!^gjmk]af9mkljYdaYfoYl]jk$kh][a[jmd]kYhhdqlgaehgk]9mkljYdaYfroyalty withholding tax on the charter payments at the non-treaty rate of 30% on gross. The imposition of such royalty withholding tax is subject to the overriding application of Australias double tax agreements (DTAs). For the sake of completeness, true time charter payments (i.e., payments for the provision of services) are not subject to such royalty withholding tax.

9kh][a[j]_ae]$[geegfdqj]^]jj]\lgYkl`]^j]a_`llYpj]_ae]$Yhhda]klg]flala]ko`gk]hjaf[ahYdhdY[]of business is outside Australia and who own or charter a ship to carry passengers, goods, livestock or mail shipped in Australia. These entities will be taxed at the current corporate tax rate of 30% on 5% of the amount paid or payable to them in respect of such carriage. In this regard, 5% of charter fees is effectively deemed to be that entitys Australian taxable income, with no offsetting deductions allowed. This means ]^^][lan]dqYfYdlYpg^)&-akaehgk]\gf_jgkk^j]a_`laf[ge]&Mf\]jlàkj]_ae]$kàhh]\af9mkljYdaYe]Yfkl`Yl_gg\kgjhYkk]f_]jkYj]hdY[]\gfZgYj\l`]kàhaf9mkljYdaY$j]_Yj\d]kkg^l`]ajfYd\]klafYlagf$a&]&$l`]j]_ae]Yhhda]klg9mkljYdaYf[gYklYdljY\]Yko]ddYkexports from Australia.

AfEYj[`*((.$l`]9mkljYdaYfLYpYlagfG^[] 9LG!akkm]\l`]fYdar]\LYpYlagfJmdaf_$LJ*((.')$oà[`considered the type of payments that form the basis for calculating the deemed Australian taxable income for the freight tax regime. In the ruling, the ATO considered whether the following types of payments were subject to the freight tax regime: 9egmflkhYa\gjhYqYZd]ZqoYqg^\]emjjY_] 9fq\akhYl[ègf]qkhYa\ZqYkàhgof]jgj[`Yjl]j]j ;d]Yfaf_[`Yj_]k

Australia

agreement which creates the Joint Petroleum Development Area (JPDA) and dictates how tax revenues, etc., from petroleum resources within the JPDA are to be shared. The treaty grants taxing rights over 90% of the income from petroleum resources derived from working in the JPDA to Timor-Leste and 10% to Australia.

Mf\]jl`]k a`hhaf_Yf\YajljYfkhgjlhjglkYjla[d]kg ^9mkljYdaYk


time charter arrangement is in substance a true bareboat charter (i.e., a contract for the lease of equipment, albeit with, for example, supernumerary crew), the ATO is likely to characterize the payments as a royalty.

As such, care needs to be exercised in relation to the tax implications where payments (e.g., royalties, payments for services) are made to a non-Australian resident relating to a vessel located in Australian waters.

The tax implications for the parties will depend on a number of circumstances, including the substance of the arrangement, the nature of the activity undertaken, the degree of activity required and whether any of l`]hYjla]k`Yn]Yf9mkljYdaYfH=&Afj]dYlagflgfYf[]$d]Yk]gjàj]hmj[`Yk]YjjYf_]e]flk$l`]^gj]a_fj]ka\]fld]kkgj'hjgna\]j kmZb][llggl`]j^Y[lkYf\[aj[meklYf[]k!k`gmd\_]f]jYddqfgl`Yn]YH=afAustralia, as such arrangements are viewed as a sale from an Australian tax perspective.

9kYj]kmdlg^l`]9LGkafl]jhj]lYlagfafLJ*((0'0$l`]j]akl`]hgl]flaYd^gjfgf%ljYfkhgjlY[lanala]kYZgYj\a ship in Australian waters to be caught in the Australian tax net, despite not giving rise to a PE for the purpose of the treaty.

Summary of general characterization of charter party contracts

* Particular DTAs may affect the liability for royalty withholding tax, particularly if the use of the equipment results in the non-resident having a PE.

** Particular DTAs (e.g., UK, USA, Norway) do not treat payments under equipment leases as royalties.Focus on international transactions

The ATO has continued to take an increased interest in international tax transactions. In particular, the 9LG`Ykaf[j]Yk]\alkk[jmlafqg^[gjhgjYl]ljYfkY[lagfkg^dYj_]Zmkaf]kk]k&Kh][a[Yj]Ykgâfl]j]kl`Yn]af[dm\]\e]j_]jk$Y[imakalagfkYf\\an]kle]flk3[dYkka[Ylagfgâfkljme]flkaflg\]Zl']imalq3[YhalYdraisings; international structures used; debt funding; and the interaction of the thin capitalization and transfer pricing regimes.

L`]9LG`Ykj]d]Yk]\nYjagmk\ak[mkkagfhYh]jkYf\jmdaf_kgn]jl`]dYkln]q]Yjkj]dYlaf_lgafl]jfYlagfYdljYfkY[lagfk$Zmkaf]kkj]kljm[lmjaf_$Yf\afljY%_jgmhfYf[af_Yf\dgYfk&9egf_gl`]jlàf_k$l`]k]hjgna\]the ATOs position regarding the application of the transfer pricing, thin capitalization and general anti-avoidance provisions, as well as domestic Australian tax law and relevant compliance obligations.

The rulings released include: LJ*()('/afl]jY[lagfg^l`]làf[YhalYdarYlagfYf\ljYfk^]jhja[af_hjgnakagfk LJ*())')ljYfk^]jhja[af_aehY[lg^[jgkk%Zgj\]jj]kljm[lmj]kZqZmkaf]kk]kLJ*()('/[gflYafkl`]9LGkgZk]jnYlagfkgfYhhjghjaYl]e]l`g\klgZ]mk]\lg\]l]jeaf]l`]Yjeklength consideration for cross-border intra-group debt arrangements under Australias transfer pricing provisions. These methods apply even where such arrangements comply with the safe harbor thresholds under the thin capitalization rules.

The ruling is retrospective in its application. Furthermore, the ruling provides that the transfer pricing rules are paramount; therefore, the thin capitalization provisions do not prevent the transfer pricing provisions from operating to price intra-group debt at arms length.

Substance of arrangement Character of income

Royalty withholding tax*

Equipment lease (e.g., a true demise or bareboat charter or dry lease) **

Royalty income DProvision of service (e.g., a true time charter party or wet lease)

Fee for services F'9

A voyage charter party Fee for services F'9

4LJ*())')[gfka\]jk[jgkk%Zgj\]jZmkaf]kkj]kljm[lmj]kg^9mkljYdaYfY[lanala]kYf\l`]ljYfk^]jhja[af_implications. The ruling also sets out the ATOs views as to the need for: 9[gee]j[aYdjYlagfYd]^gjl`]j]kljm[lmjaf_^jgeYf9mkljYdaYfZ]f]lh]jkh][lan] 9hhjghjaYl]hja[af_g^^mf[lagfkgjYkk]lkegnaf_gn]jk]Yk Alkhgo]jlgj][`YjY[l]jar]Yj]kljm[lmjaf_lgj]][lYjekd]f_l`Z]`Ynagj9\nYf[]hja[af_YjjYf_]e]flk` Yn]YdkgZ]]fj]nak]\l`jgm_ `HjY[la[]KlYl]e]flDYo9\eafakljYlagf HKD9!*())')Ykj]d]Yk]\gf)/EYj[ `*())&L a`kj]klYl]kl`]9LGk[geeale]fllg9\nYf[]Hja[af_9_j]]e]flk(APAs) and sets out timelines and processes for such agreements between taxpayers and the ATO.Changes to the transfer pricing rules

Historically, Australias transfer pricing legislation has been encompassed in Division 13 Income Tax Assessment Act 1936 (Cth). Division 13 applies to any taxpayer who has supplied or acquired property under an international agreement, where the Australian Commissioner of Taxation (the Commissioner) considers that the taxpayer has: J][]an]\[gfka\]jYlagfoà[òYkd]kkl`Yfl`]Yjekd]f_l`[gfka\]jYlagfafj]kh][lg^l`]kmhhdq Fglj][]an]\Yfq[gfka\]jYlagf$o`]fYfYjekd]f_l`hYjlqogmd\`Yn]]ph][l]\km[`[gfka\]jYlagf ?an]f[gfka\]jYlagfl`Yl]p[]]\kYfYjekd]f_l`[gfka\]jYlagfafj]kh][lg^l`]Y[imaj]\hjgh]jlqL`]k]hjgnakagfko]j]afl]f\]\lg[gmfl]jfgf%Yjekd]f_l`ljYfk^]jhja[af_gjafl]jfYlagfYdhjglkà^laf_Zq]fYZdaf_l`];geeakkagf]jlgY\bmklhjglkZqj]^]j]f[]lgl`][gf\alagfkoà[ògmd\`Yn]existed between independent parties under comparable circumstances. . However, during recent transfer hja[af_[gmjl[Yk]kaf9mkljYdaY$l`]YZadalqg^l`]9LGlgYhhdqhjgl%ZYk]\ljYfk^]jhja[af_e]l`g\kYf\j]dqmhgfl`]Gj_YfakYlagf^gj=[gfgea[;g%gh]jYlagfYf\During November 2012, a second exposure draft was released (containing Subdivisions 815-B to 815-E), which, if (as expected) enacted, will introduce a full self-assessment regime in Australia for transfer pricing and implement similar rules to those outlined above for all international related party transactions. The new \jY^ld]_akdYlagfYdkgeYc]kj]^]j]f[]lgl`][gf[]hlg^YljYfk^]jhja[af_Z]f]lYf\j]imaj]klYphYq]jk

Australia

1 Taxation Ruling TR 94/14 para 102 Taxation Ruling TR 94/14 para 103 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations


to consider whether the actual conditions with related parties are consistent with what the arms length conditions would have been.

The exposure draft released in November 2012 did not introduce mandatory contemporaneous transfer pricing documentation requirements; however, it does state that where a taxpayer has not prepared contemporaneous transfer pricing documentation, it will be treated as not having a reasonably arguable position in relation to their transfer pricing arrangements. Where no reasonably arguable position is accepted by the ATO in any future review, higher penalties are likely to apply in the event of any adjustments to taxable income.

The new draft legislation contained in the second exposure draft will apply prospectively from the date of Royal Assent being granted (which is expected to be in early 2013). At this time, Subdivision 815-A and Division 13 will be repealed and replaced by Subdivisions 815-B to 815-E (applicable to all international related party transactions in treaty and non-treaty countries).

One of the key impacts of the new legislation is that it effectively reinforces the power of the ATO to reconstruct a transaction between related parties, on the basis that independent parties dealing at arms length would not have entered into the arrangements which actually exist between two related parties. In this case, the ATO may seek to hypothesize an arms length arrangement and then assess what a commercial outcome from those arrangements would be.International dealings schedule

The ATO has introduced a new schedule, the International Dealings Schedule (IDS), which replaces Schedule 25A and the thin capitalization schedule for 2012 income tax returns, including early balancers. The IDS is mandatory where the aggregate amount of transactions or dealings with international related parties, including the value of property transferred or the balance outstanding on any loans, is greater than A$2 million or the thin capitalization provisions apply.

The IDS requires a greater level of detail in many of the disclosures compared to Schedule 25A. The ATO has recognized that taxpayers might not be able to fully complete the schedule and has stated that taxpayers should approach the 2012 IDS on a best efforts basis. However, the ATO does expect taxpayers to be in a position to be fully compliant for the 2013 IDS and onward.Reportable tax position schedule

The ATO undertook a pilot program for the 2012 income year that required some taxpayers to disclose whether they have a material reportable tax position (RTP). A RTP is one or more of the following: 9eYl]jaYdhgkalagfl`YlakYZgmlYkdac]dqlgZ][gjj][lYkaf[gjj][lgjd]kkdac]dqlgZ][gjj][ll`Yf

incorrect, i.e., where there is 50% or less likelihood of the position being upheld by a court 9eYl]jaYdhgkalagfafj]kh][lg^o`a[`mf[]jlYaflqYZgmllYp]khYqYZd]gjj][gn]jYZd]akj][g_far]\Yf\'

gj\ak[dgk]\afl`]lYphYq]jkgjYj]dYl]\hYjlqkfYf[aYdklYl]e]flk 9lYphYq]jlja__]jkY[YhalYd_YafklYp]n]fl\mjaf_l`]af[ge]q]Yj$l`]lYphYq]jk[YhalYdhjg[]]\k

exceed A$200 million, and there is a material difference between the accounting and tax consequences of the event

This pilot applied to selected large and key taxpayers in Australia, other than those with advance compliance arrangements with the ATO. It is expected that the RTP pilot will be rolled out to a wider population of taxpayers in 2013.Other issues

;gfkakl]floal`j][]flG=;

6Australia

Af*()*$l`]?gn]jfe]flafljg\m[]\aflgHYjdaYe]flY[gehj]`]fkan]hY[cY_]g^j]^gjeZaddklgl`]Australian shipping industry designed to increase the international competitiveness of the Australian shipping industry and allow Australian shipping companies to compete more effectively on international routes.

The reform package had four key elements: LYpj]^gjeklgj]egn]ZYjja]jklgafn]kle]flaf9mkljYdaYfkàhhaf_Yf\lg^gkl]jl`]_dgZYd

competitiveness of the shipping industry Kaehda]\l`j]]%la]jda[]fkaf_^jYe]ogjc^gjhYjla[ahYlagfafl`][gYklYdljY\] =klYZdakè]flg^Yf9mkljYdaYfAfl]jfYlagfYdKàhhaf_J]_akl]j =klYZdakè]flg^YEYjalae]Ogjc^gj[]gjmeThe package of bills received Royal Assent on 21 June 2012.

The tax reforms contained in the package aim to address the cost disadvantages faced by Australian ship owners Yf\]f[gmjY_]j]f]oYd^ gjl`]Y_af_9mkljYdaYf]]l&L`]lYpj]^gjeko]j]]^^ ][lan]^ jge)Bmdq*()*&The tax reforms provide a tax exemption regime for Australian ship operators for coastal shipping to and from Australia (but excluding service vessels for offshore oil and gas projects). The exemption delivers an effective tax rate of zero on the qualifying elements for corporate income tax. Ship operators can qualify for làk]p]ehlagfo`]j]$Yegf_gl`]jj]imaj]e]flk$Ykàhhaf_]p]ehlaf[ge][]jla[Yl]akgZlYaf]\^jgethe Department of Infrastructure and Transport.

:jgY\dq$Ykàhhaf_]p]ehlaf[ge][]jla[Yl]oaddZ]akkm]\gfYn]kk]d%Zq%n]kk]dZYkako`]fYddg^l`]following conditions are met:a. The operator is an Australian corporation.Z& L`]n]kk]d$^gjYld]Yklgf]gjegj]\Yqk\mjaf_l`][]jla[Yl]q]Yj2 E]]lkl`]lgffY_]j]imaj]e]fl ZjgY\dq`YkY_jgkklgffY_]g^Yld]Ykl-((! Akj]_akl]j]\mf\]j9mkljYdaYkHjaeYjqgjAfl]jfYlagfYdKàhhaf_J]_akl]jk


lg\]^]jl`]_Yafgjhjglgfl`]kYd]g^Yfgd\n]kk]dl`Ylakj]hdY[]\ZqYf]on]kk]doalàflogq]Yjk&O`]j]the gain is higher than the cost of the new vessel, the excess will remain taxable.Seafarer refundable tax offset

A refundable tax offset (payable to employers) will be introduced for withholdings on payments made to Australian resident seafarers for overseas voyages, where the seafarer is engaged on a vessel that has gZlYaf]\Yf]p]ehlagf[]jla[Yl]&:jgY\dq$afgj\]jlg[dYael`]g^^k]l$l`][gehYfqemkl`Yn]Yld]Yklgf]af\ana\mYdo`gimYda]k^gjl`]lYpg^^k]l^gj1)\Yqkgjegj]afl`]af[ge]q]Yj&9dl`gm_`l`]n]kk]doaddf]]\lg`gd\Yf]p]ehlagf[]jla[Yl]$aloaddfglZ]f][]kkYjq^gjallge]]ll`]eYfY_]e]flYf\ljYafaf_j]imaj]e]flg^l`]kàhhaf_af[ge]]p]ehlagf[]jla[Yl]&Royalty withholding tax exemption

From 1 July 2012, payments made by an Australian company lessee under a bareboat lease to a foreign lessor may qualify for exemption from Australian royalty withholding tax (of up to 30%) where the vessel: AkfglYf]p[dm\]\n]kk]d ]&_&$g^^k`gj]af\mkljqn]kk]dkYf\afdYf\oYl]joYqgj`YjZgjn]kk]dk! E]]lk[gf\alagf [!g^l`]af[ge]lYp]p]ehlagfYZgn]L`]j]akfgj]imaj]e]fl^gjl`]9mkljYdaYfj]ka\]fl[gehYfqlg`gd\]al`]j[]jla[Yl]afgj\]jlgY[[]kkl`]royalty withholding tax exemption.

1.2.2 Consolidated groups for tax purposes From 1 July 2002, wholly owned Australian groups may elect to form a consolidated group for income tax hmjhgk]k&?]f]jYddq$_jgmhkoal`Ykaf_d][geegf9mkljYdaYf%j]ka\]flhYj]fl]flalqYj]YZd]lg[gfkgda\Yl]&However, Australian-resident entities with a common overseas 100% ultimate owner (i.e., a holding company) may also form a consolidated group (known as a multiple entry tax consolidated group).

Consolidation is optional, but if a group decides to consolidate, all wholly owned companies and trusts must be included, where the wholly owned entity is owned by a single common Australian-resident parent or under an Australian entry point which has elected to be included in the consolidated group.

When the consolidation election is made, the head company of the group will submit a single income tax return on behalf of all of the wholly owned entities within the group. From the time of consolidation, intra-group transactions (such as asset transfers, provision of services) are disregarded and all tax attributes (such as franking account balances, carryforward tax losses) are held at the head company level. When a single company exits the group, its losses and franking credits must remain within the group.

1.2.3 Loss recoupment rulesPrior year losses may be utilized to reduce current year taxable income subject to the satisfaction of various jmd]k$hjaeYjadqeYaflYafaf_[gflafmalqgêYbgjalqZ]f][aYdgof]jkàh cfgofYkl`][gflafmalqgôwnership test) or failing that, passing the same business test.

On 23 August 2012, Assistant Treasurer David Bradbury released for consultation exposure draft legislation and explanatory material to introduce company loss carry-back (carry-back) into the Australian tax system. The stated purpose of the carry-back is to assist certain companies (the carry-back is not applicable to trusts or sole traders) during the period of global economic downturn. Broadly, under the proposed loss carry-back: AfalaYddq$^jgel`]*()+af[ge]q]Yj$[gehYfa]koaddZ]YZd]lg[YjjqZY[cmhlg9)eaddagfgîmYda^qaf_

revenue losses to obtain a refund of tax paid in the 2012 income year. >jgel`]*(),af[ge]q]Yj$[gehYfa]k[Yf[YjjqZY[cmhlg9)eaddagfgîmYda^qaf_j]n]fm]dgkk]k

against Australian income tax paid up to two years earlier.The loss carry-back will be delivered via a refundable loss carry-back tax offset in the current income year. The amount of the offset will be capped at the companys franking account balance at the end of the income year in which the offset is sought to be claimed. Subject to the outcome of the federal election called for September 2013, these rules are expected to be enacted into law during the 2013 calendar year.

8Australia

)&*&,LYpYlagfg^hjgl\akljaZmlagfkL`][mjj]fl[gjhgjYl]lYpjYl]g ^+(_]f]jYddqYhhda]klgk a`hhaf_[gehYfa]k&


arrangements.

These laws apply to affected taxpayers (broadly, those with assets over A$300 million or annual turnover gn]j9)((eaddagf$gjfYf[aYdafklalmlagfkoal`lmjfgn]jgn]j9*(eaddagfgj`gd\af_kg^hj]k[jaZ]\lYp%\]^]jjYdk][mjala]k!&L`]k]j]^gjekYhhdqlgfYf[aYdYjjYf_]e]flkjkl`]d\afaf[ge]q]Yjk[gee]f[af_gfor after 1 July 2010.

1.2.7 Resource taxationThe petroleum resources rent tax (PRRT) has been expanded effective from 1 July 2012. Hj]nagmkdq$l`]HJJLYhhda]\YlY,(jYl]lgl`]lYpYZd]mhklj]Yehjglkg^[]jlYafg^^k`gj]hjgb][lkgfdq&L`]]phYf\]\HJJLYdkgYhhda]\lglYpYZd]mhklj]Yehjgb][lhjglk^jgel`]extraction of onshore non-renewable petroleum resources (e.g., coal seam gas and oil shale). PRRT is deductible for corporate tax purposes.

L`]eafaf_j]kgmj[]kj]fllYp EJJL!Yhhda[YZd]lgajgfgj]Yf\[gYdhjg\m[lagfak]^^][lan]^jge)Bmdq*()*&L`]EJJLYhhda]kYjYl]g^+($Y^l]jhjgna\af_Y*-]pljY[lagfYddgoYf[] j]kmdlaf_afYf]^^][lan]lYpjYl]g^**&-!lgeafaf_hjglk$oal`YfYddgoYf[]^gj[]jlYaf[YhalYd]ph]f\almj]k&EJJLak\]\m[laZd]^gj[gjhgjYl]lYphmjhgk]k$Yf\Y[j]\alakYddgo]\^gjklYl]jgqYdla]k&

1.3 Recent changes to the tax law1.3.1 Recent developments in DTAs

During 2010, Australia signed new DTAs with Chile and Turkey. However, at the time of printing, there was no date available as to when these agreements would enter into force.

Australia has continued to negotiate with Canada and the Netherlands to update their respective DTAs, and also with Pakistan to establish a DTA. In addition, Australia and Switzerland have announced they will enter aflgf]_glaYlagfklgmh\Yl]l`]]paklaf_9mkljYdaY'Koalr]jdYf\

10

Australia

regional holding companies in Australia. These amendments and proposals include: Hjghgk]\eg\a[Ylagfklgl`]k[gh]gâf[ge]YlljaZmlYZd]mf\]jl`][gfljgdd]\^gj]a_f[gehYfq ;>;!

rules (further details below). J]h]Ydg^l`]^gj]a_fafn]kle]fl^mf\ >A>!Yf\\]]e]\hj]k]fl]flald]e]fljmd]k& 9hYjla[ahYlagf]p]ehlagf^gj[YhalYd_YafkYjakaf_^jgel`]kYd]g^^gj]a_fk`Yj]`gd\af_klgl`]]pl]fl

that the underlying assets are active. However, interests in partnerships or entities that are treated kaeadYjdqlgYhYjlf]jkàh^gjlYphmjhgk]k ]&_&$MKDD;k!eYqfglYdoYqkZ]f]l^jgelàk]p]ehlagf&

L`]YZadalqlghYkk^gj]a_f\ana\]f\kYf\^gj]a_fZjYf[`hjglkl`jgm_`Yf9mkljYdaYf[gjhgjYl]kljm[lmj]without attracting Australian corporate tax or dividend withholding tax.

=p]ehlagfk^gj[]jlYaf\ana\]f\Yf\hjglj]hYljaYlagfk& =p]ehlagf^gjfgf%9mkljYdaYfj]ka\]flkgf[YhalYd_YafkYjakaf_^jgel`]\akhgkYdg^k`Yj]kaf9mkljYdaYf%

resident (non-landholding) companies. Kaehda[Ylagfg^l`]jmd]k\]Ydaf_oal`l`]lj]Yle]flg^^gj]a_fdgkkYf\^gj]a_flYp[j]\alk&CFC rules proposed amendments

There are currently proposals to simplify the CFC regime, and an exposure draft law for the revised regime was released in February 2011. Further exposure draft legislation is expected to be released by mid-2013. L`]j]akfghjghgk]\\Yl]^gjl`]afljg\m[lagfg^l`]fYdd]_akdYlagf&L`]j]nak]\jmd]kaâfljg\m[]\Yj]intended to provide for the following: 9da_fl`][gf[]hlg^[gfljgdafl`];>;jmd]klgl`gk]mf\]jY[[gmflaf_klYf\Yj\k FYjjgol`]lqh]kgâf[ge]]Yjf]\ZqY;>;oà[èYqZ]kmZb][llgl`]jmd]k oà[`k`gmd\fgdgf_]j

include related party sales and services income) J]\m[]YlljaZmlagf^gjaf[ge]\]jan]\^jgeYfgl`]je]eZ]jg^l`];>;k_jgmhgj^jgel`][gf\m[lg^

an active trade or businessFAF Rules

Foreign investment fund (FIF) rules dealing with attribution of income related to certain non-controlling afl]j]klko]j]j]h]Yd]\$]^^][lan]^gjl`]*()('))af[ge]q]YjgfoYj\&L`]^gj]a_fY[[memdYlagf^mf\(FAF) rule will replace the FIF rules and be effective from the same time as the CFC rules discussed above. L`]>9>jmd]akafl]f\]\lg[j]Yl]YfYjjgodq\]f]\Yfla%Ynga\Yf[]jmd]lYj_]laf_afl]j]kl%dac]j]lmjfkafcertain foreign entities.

1.3.3 Tax depreciationTo encourage capital investment, amendments have been made to the tax depreciation regime. The amendments allow an acceleration of tax depreciation deductions to the earlier part of an assets effective life. This is achieved by increasing the rate at which the asset can be depreciated under the diminishing value gjj]\m[af_ZYdYf[]k!e]l`g\&L`]k][`Yf_]kYhhda]\lgYkk]lkjkl`]d\gfgjY^l]j)(EYq*((.&L`]j]Yj]kh][a[laeaf_[gfka\]jYlagfk^gjl`]Yhhda[Ylagfg^l`]k]jmd]ka^l`]Ykk]lak`]d\mf\]jY[gfljY[lgja^the asset is constructed.

1.4 Other Australian taxes1.4.1 Goods and services tax

9mkljYdaY`YkY_gg\kYf\k]jna[]klYp ?KL!l`YlakYhhda]\lgegkl_gg\kYf\k]jna[]k[gff][l]\oalÀustralia (i.e., goods imported into Australia or goods installed or assembled in Australia), which is levied at YjYl]g^)(&9kàhhaf_]flalql`Ylakj]_akl]j]\^gj?KL[Yf_]f]jYddq[dYaeZY[cafhmllYp[j]\alk^gj?KLincurred on acquisitions provided the acquisitions were made for a creditable purpose (i.e., the acquisition was acquired in carrying on an enterprise and must not relate to making supplies that would be input taxed or of a private or domestic nature).

Egkl_gg\kaehgjl]\aflg9mkljYdaYYj]kmZb][llg?KL&O`]j]Ykàhhaf_]flalqaehgjlk_gg\kaflg9mkljYdaYYf\l`]aehgjlimYda]kYkYlYpYZd]aehgjlYlagf$?KLakhjaeY^Y[a]hYqYZd]Zql`]kàhhaf_]flalqYll`]lae]


gâehgjlYlagf&L`]kàhhaf_]flalq[Yfl`]f[dYaeYfafhmllYp[j]\al^gjl`]?KLhYa\gfl`]aehgjlYlagfhjgna\]\alakj]_akl]j]\^gj?KLYf\l`]aehgjlYlagfoYk^gjY[j]\alYZd]hmjhgk]&>mjl`]jegj]$Yhhjgn]\aehgjl]jk[Yfmk]l`]\]^]jj]\?KLk[`]e]&Làkk[`]e]]fYZd]kl`gk]aehgjl]jklg\]^]jl`]?KLgl`]joak]hYqYZd]gfaehgjlYlagfmfladl`]jklZmkaf]kkY[lanalqklYl]e]flakkmZeall]\Y^l]jl`]_gg\kYj]aehgjl]\&Afegkl[Yk]k$làk\]^]jjYde]Yfkl`Yl?KLak[Yf[]d]\$YkY[gjj]khgf\af_afhmllYp[j]\al[YfZ][dYae]\afthe same return.

?KL%^j]]klYlmkakmkmYddqYhhda]\lg]phgjlkg ^_gg\k$afl]jfYlagfYdljYfkhgjl$Ykkg[aYl]\afkmjYf[]$Yf\YjjYf_af_ljYfkhgjlYf\]phgjlk]jna[]k&O a`d]?KL%^j]]kmhhda]kYj]fglkmZb][llg?KL$l`]kmhhda]jeYqkladdclaim input tax credits incurred on acquisitions connected with the supply. GST proposed changes

Mf\]j[gfka\]jYlagfYj]YfmeZ]jg^[`Yf_]kZ]af_hjghgk]\lgkaehda^ql`]Yhhda[Ylagfg^?KLgf[jgkk%border transactions. The proposed reforms include the following: EYcaf_?KL%j]_akl]j]\]flala]koal`Yhj]k]f[]af9mkljYdaYj]khgfkaZd]^gjl`]?KL[gfk]im]f[]kg^

supplies of goods, services and intangibles supplied to them by non-residents who do not carry on an enterprise in Australia (or have one and do not use it)

;`Yf_]klgl`]ngdmflYjqYf\[gehmdkgjqj]n]jk][`Yj_]hjgnakagfklgYdd]naYl]l`]j]imaj]e]flkg^fgf%j]ka\]flklgj]_akl]j^gj9mkljYdaYf?KLafkge][aj[meklYf[]k

;`Yf_]klgl`]Y_]f[qhjgnakagfklgYhhdqegj]ZjgY\dqYf\daeall`][aj[meklYf[]kafoà[`Yfgf%j]ka\]flakj]imaj]\lgj]_akl]j^gj9mkljYdaYf?KL

J]egnaf_l`]j]imaj]e]fl^gjfgf%j]ka\]flklgj]_akl]j^gj9mkljYdaYf?KLo`]fl`]qgfdqeYc]?KL%^j]]supplies

1.4.2 Stamp dutyThe various stamp duty acts may also apply to certain transactions involving vessels (e.g., acquisition or ljYfk^]jg^n]kk]dkgjZmkaf]kk!&?an]fl`YlklYeh\mlqakYklYl]lYp$l`]aehda[Ylagfk]kk]flaYddq\]h]f\mhgfthe state or territory of Australia in which the vessels are located. Depending on the relevant jurisdiction, the transfer or acquisition of a vessel may attract an exemption from duty. In addition, stamp duty may not be payable when the vessel is not within the relevant states territorial waters at the time of the transaction. This will depend on the nature of the transaction and the jurisdiction(s) in question.

1.4.3 Employment taxesKYdYja]kYf\oY_]kYf\fgf%[Yk`Z]f]lkhYa\'hjgna\]\lgk]Y^Yj]jk`Yn]l`]hgl]flaYdlgYlljY[lYjYf_]g^taxes in Australia, including: HYq%Yk%qgm%_g H9Q?!oal``]d\YlnYjagmkjYl]k^jgehYqe]flg^kYdYjqYf\oY_]klg]ehdgq]]ko`]j]

those payments are taxable in Australia. The rate of withholding is affected by the tax residence of the individual.

>jaf_]Z]f]lklYp >:L!hYqYZd]Zql`]]ehdgq]jYl,.&-g^l`]_jgkk]\%mhnYdm]g^[]jlYaffgf%[Yk`Z]f]lkhjgna\]\lg]ehdgq]]k&

HYqjgddlYp_]f]jYddqhYqYZd]Yl,&/-lg.&0-gôY_]khYa\lg]ehdgq]]kYf\$afkge][Yk]k$contractors. Companies may be entitled to an annual payroll tax exemption between A$550,000 and A$1,750,000 depending on the state in which the wages are incurred. When a company is related to another company (i.e., as a parent or subsidiary, or by reason of common directors, common employees or shared ownership), the companies may be grouped for the purposes of calculating their payroll tax liability and may only determine their annual exemption entitlement on the basis of the total wages of the group.

Kmh]jYffmYlagf[gf[]hlmYddq]imanYd]fllgh]fkagfkmhhgjl&;gfljaZmlagfkYj]j]imaj]\lgZ]eY\]lgYsuperannuation fund at 9% (up to a capped amount) of earnings paid to employees and, in some cases, contractors. An exemption may apply depending on the location of services and tax residence of the individual.

The compulsory superannuation rate is to increase to 9.25% in the 2014 income year. This rate will increase

12

Australia

over the succeeding income years to a rate of 12% in the 2020 income year.

Whether the above taxes apply will depend on a number of factors, including: O`]l`]jl`]][gfgea[]ehdgq]jg^l`]k]Y^Yj]j`YkYH=af9mkljYdaY& O`]l`]j9mkljYdaY`Ykf]_glaYl]\Y


employees and employers are covered by the modern awards standards, the National Employment Standards (NES) and the Seagoing Industry Award 2010, under which employees are entitled to certain minimum conditions. The NES include minimum entitlements to leave, public holidays, notice of termination and redundancy pay.

L`]>O9Yhhda]klg9mkljYdaYfkàhkYf\kge]^gj]a_fY__]\kàhkgh]jYlaf_af9mkljYdaYkl]jjalgjaYdk]Yk$extending to those that are operating pursuant to a license or permit while the ship is in the exclusive economic zone or in the waters above the continental shelf of Australia.

2.2 National labor law9mkljYdaYkdYZgjdYokYhhdqlgYdd9mkljYdaYf%Y__]\n]kk]dkYko]ddYkafl]jfYlagfYddqY__]\n]kk]dkl`Ylcarry Australian domestic cargo on a permit issued under Navigation Act 1912.

All personnel (including international seafarers on Australian regulated ships and personnel who work on Yf\'gjkmhhdqg^^k`gj]gadYf\_Yk^Y[adala]k!o`gYj]j]imaj]\lgogjcmfegfalgj]\afYeYjalae]k][mjalqrgf]emkl`gd\YEYjalae]K][mjalqA\]fla[Ylagf;Yj\ EKA;!&Làk[Yj\a\]fla]kYfaf\ana\mYdo`g`YkZ]]fl`]kmZb][lg^YZY[c_jgmf\[`][cYf\aknYda\^gjn]q]Yjk&

2.3 Regulations on employing personnel=ehdgq]]kgf9mkljYdaYf%Y__]\n]kk]dkf]]\lgZ]j]ka\]flkg^9mkljYdaY Ydl`gm_`fglf][]kkYjadq[alar]fk!o`g`Yn]eYjaf]imYda[Ylagfk^jgel`]9mkljYdaYfEYjalae]KY^]lq9ml`gjalq 9EK9!gjgn]jk]YkimYda[Ylagfkj][g_far]\YkYf]imanYd]flZq9EK9&N]kk]dkafngdn]\af[gYklYdljY\] o`]l`]j9mkljYdaYfgj^gj]a_f%Y__]\!emklgZlYafYda[]fk]lgljY\]&Gf]g^l`]j]imaj]e]flkg^l`Ylda[]fk]akl`Yll`]gof]jhYqk9mkljYdaYfoY_]klgl`][j]o&EYjaf]imYda[Ylagfservices are provided through nine centers around Australia.

LgimYda^q^gjYf9EK9eYjaf]imYda[Ylagf$k]Y^Yj]jkemkl[gehd]l]YfYhhjgn]\[gmjk]g^klm\q&L`]k]Yj][gf\m[l]\Yll`]9mkljYdaYEYjalae];gdd]_]afDYmf[]klgf$LYkeYfaY$Yf\Yll][`fa[YdYf\^mjl`]j]\m[Ylagfafklalml]kYf\[gdd]_]kaf>j]eYfld]$F]o[Ykld]Yf\Kq\f]q&9\\alagfYddq$^gjakkm]g^Y[]jla[Yl]g^[geh]l]f[]$l`]ljYaf]]`YklghYkkYfgjYd]pYeafYlagf[gf\m[l]\Zq9EK9]pYeaf]jkgfgh]jYlagfYdknowledge and critical skills.Gn]jk]YkimYda[Ylagfk9dd[j]oe]eZ]jkgf9mkljYdaYfkàhkYj]j]imaj]\lg`gd\Yf9mkljYdaYfeYjaf]imYda[Ylagfj]d]nYfllgl`]aj\mla]k&9EK9Ykk]kk]keYjaf]imYda[Ylagfkakkm]\gn]jk]Yklg^gj]a_fj]ka\]flko`goak`lgea_jYl]lg9mkljYdaYYf\j]imaj]9mkljYdaYfimYda[Ylagfklgogjcgf9mkljYdaYfkàhk&

2.4 Treaties relating to social security contributionsSocial security treaties regarding double superannuation coverage have been negotiated with Austria, :]d_ame$;YfY\Y$;àd]$;jgYlaY$;qhjmk$l`];r][`J]hmZda[$afdYf\$?]jeYfq$?j]][]$@mf_Yjq$Aj]dYf\$AlYdq$BYhYf$Cgj]Y$DYlnaY$l`]^gje]jQm_gkdYnJ]hmZda[gÊY[]\gfaY$EYdlY$l`]F]l`]jdYf\k$F]oR]YdYf\$FgjoYq$HgdYf\$Hgjlm_Yd$KdgnYcJ]hmZda[$Kdgn]faY$Kgml`Cgj]Y JGC!$Koalr]jdYf\Yf\l`]MK&J][ahjg[Yd`]Ydl`Y_j]]e]flk`Yn]Z]]ff]_glaYl]\oal`:]d_ame$>afdYf\$Aj]dYf\$AlYdq$EYdlY$l`]F]l`]jdYf\k$F]oR]YdYf\$FgjoYq$Ko]\]fYf\l`]MC&

*&- EYffaf_akkm]koal`qaf_l`]9mkljYdaYfY_9mkljYdaYf%Y__]\n]kk]dkYj]kmZb][llg9mkljYdaYfhadglY_]o`]j]l`]n]kk]d]p[]]\k*,e]l]jkaflgffY_]length.

3. Corporate structure3.1 Most commonly used legal structure for shipping activities

The most commonly used legal structure for the operation of shipping activities is a limited liability [gjhgjYlagf$cfgofaf9mkljYdaYYkYhjghja]lYjqdaeal]\ HlqDl\![gehYfq&

14

Australia

4. Grants and incentives,&) Kh][a[Yf\'gj_]f]jYdkmZka\a]kYnYadYZd]lgkàhhaf_[gehYfa]k

Fgkh][a[af[]flan]kYj]YnYadYZd]^gjkàhhaf_[gehYfa]k&@go]n]j$l`]j]akY_gn]jfe]flkqkl]el`Ylprovides shipping subsidies and applies to the shipping of certain goods and cargo between the mainland of Australia and Tasmania (the Tasmanian Freight Equalization Scheme and the Tasmanian Wheat Freight Scheme).

4.2 Investment incentives for shipping companies and the shipbuilding industry9ll`]lae]g^hmZda[Ylagf$l`]j]Yj]fggl`]jkh][a[af[]flan]k[mjj]fldqYnYadYZd]lgl`]kàhZmad\af_industry. In the meantime, there are general tax incentive programs designed to encourage research and development (R&D) activities in Australia.

A number of changes to the R&D Tax Incentive system have been enacted (in effect from 1 July 2011), including a move towards an R&D tax credit system. This involves a 40% tax credit (equivalent to a 133% tax deduction at current corporate tax rates), a cash refundable 45% tax credit for smaller companies (with annual aggregated turnover of less than A$20 million), the removal of the former 175% incremental \]\m[lagfYf\YfYjjgoaf_g^l`]Y[lanala]kl`YloaddimYda^qmf\]jl`]f]oJ


EYjaf]ljYfkhgjlakYf]da_aZd]Y[lanalq& H]ljgd$Yko]ddYk\a]k]d$[YfZ][dYae]\^gj]d][lja[alq_]f]jYlagf&L`akaf[dm\]k[gee]j[aYd]d][lja[alq

generation that was previously not eligible. As not all consumption of fuels is eligible, claiming of FTCs should be considered on a case-by-case basis.

The current fuel tax rate is A$0.38143 per liter for most fuels, including diesel, petrol and fuel oils. However, the introduction of a price on carbon emissions has an impact on the rate of FTCs available for each type of eligible fuel. While fuels are not covered directly under the carbon price mechanism, an effective carbon price will be imposed through changes in FTCs or changes in excise, with the exception of when an entity is part of the opt-in scheme for liquid fuels (see Section 1.4.4).

L`]^gddgoaf_lYZd]daklkl`]j]d]nYfl>L;aehY[l^gj]Y[`^m]dlqh]gn]jl`]l`j]]%q]Yjp]\hja[]h]jag\$Yf\l`]_mj]kYj]ZYk]\gfl`]]eakkagfkjYl]g^l`]nYjagmk^m]dk&L`]Yegmflkk`gof^gj]Y[`fYf[aYdq]Yjh]jag\Yj]kmZljY[l]\^jgel`])((jYl]&L`]j]^gj]$afl`]*(),)-af[ge]q]Yj$>L;k^gj\a]k]d^m]d[gfkme]\afYf]da_aZd]Y[lanalqoaddZ]YnYadYZd]Yl+)&*0-['D +0&),+.&0-0!&Fgl]l`Yl^jge)Bmdq*()-$l`]hja[]gf[YjZgfoaddZ]gYlaf_Yf\l`]>L;jYl]oaddZ]\]l]jeaf]\oal`j]^]j]f[]lgl`]kap%egfl`average of the carbon price.

*Duty rate increases over transitional period to reach full rate on 1 July 2015.

- Full rate claimed when entity is part of the opt-in scheme

L`]fYf[aYdaehY[lg^l`]j]\m[lagfaf>L;koaddZ]j]\m[]\Zql`]^Y[ll`Yl$kaf[])Bmdq*()*$l`gk]activities previously eligible for FTCs at the 50% rate are now eligible for credits at the full rate less the price on carbon.

5. General information5.1 Infrastructure5.1.1 Major ports

Name of port Location of port

Botany Bay New South Wales

Cmjf]dd New South WalesNewcastle New South Wales

HgjlC]eZdY New South WalesSydney Harbour New South Wales

Darwin Northern Territory

100% rate Carbon price

Fuel 100% rate c/L 201213 201314 201415

Petrol 38.143 5.52 5.796 6.096

Diesel 38.143 6.21 6.521 6.858

LPG* 2.512.5 3.68 3.864 4.064

LNG/CNG* 5.2226.13 c/kg 6.67 7.004 7.366

Australia

16

Name of port Location of port

Brisbane Queensland

Bundaberg Queensland

Cairns Queensland

?dY\klgf] QueenslandE[CYq QueenslandRockhampton Queensland

Townsville Queensland

Adelaide South Australia

HgjlDaf[gdf South AustraliaWhyalla South Australia

Burnie Tasmania

Devonport Tasmania

Hobart Tasmania

DYmf[]klgf Tasmania?]]dgf_ VictoriaHastings Victoria

E]dZgmjf] VictoriaPortland Victoria

Albany Western Australia

Broome Western Australia

Bunbury Western Australia

Cockburn Sound Western Australia

Dampier Western Australia

Esperance Western Australia

Fremantle Western Australia

Port Hedland Western Australia

5.1.2 Port facilitiesThe following facilities are available: EYafl]fYf[]Yf\j]hYaj


Name of port Location of port Location of airport

Broome Broome Broome

Bunbury Bunbury Bunbury

Burnie Devonport Devonport

Cairns Cairns Cairns

Darwin Darwin Darwin

Devonport Devonport Devonport

Fremantle Perth Perth

?dY\klgf] ?dY\klgf] ?dY\klgf]Hobart Hobart Hobart

Cmjf]dd Caf_k^gj\Keal` EYk[gl$Kq\f]qDYmf[]klgf DYmf[]klgf DYmf[]klgfE]dZgmjf] Tullamarine TullamarineNewcastle Newcastle Williamstown

HgjlC]eZdY Wollongong Albion ParkSydney Harbour Caf_k^gj\Keal` EYk[gl$Kq\f]qTownsville Townsville Townsville

Whyalla Whyalla Whyalla

5.1.4 Support services for the shipping industry The following support services for the shipping industry are readily available: :Yfckoal`Ykàhhaf_\]kc ;gfkmdlaf_jekkh][aYdaraf_afkàhhaf_ EYjalae]dYok]jna[]k AfkmjYf[]Zjgc]jk^gjl`]kàhhaf_af\mkljq

5.1.5 Maritime educationEYjalae]]\m[Ylagfakhjgna\]\Zq9mkljYdaYfEYjalae];gdd]_]DYmf[]klgf$LYkeYfaY$Yf\l][`fa[YdYf\further education institutes and colleges in Fremantle, Newcastle and Sydney. Increased government funding has been proposed to support the delivery of maritime and maritime-related vocational education and training to improve the national seafarers shortage.

5.2 Safety and environmental issues5.2.1 Implementation of the International Safety Management Code on board vessels

9ddn]kk]dkj]_akl]j]\af9mkljYdaYYkH`Yk])Kàhk`Yn]aehd]e]fl]\l`]Afl]jfYlagfYdKY^]lqEYfY_]e]flCode.

-&*&*L`]Afl]jfYlagfYdGj_YfarYlagf^gjKlYf\Yj\arYlagf1((*[]jla[Yl]EgkldYj_]ljY\af_n]kk]dkYhhdq^gj[]jla[Ylagfmf\]jAfl]jfYlagfYdGj_YfarYlagf^gjKlYf\Yj\arYlagf AKG!1((*l`jgm_`

Australia

18

5.2.3 Safety rules regarding manning Australias rules regarding manning are seen as relatively strict by some in the industry.

5.2.4 Special regulations on safety and the environment9mkljYdaY`Ykka_f]\l`]Afl]jfYlagfYd;gfn]flagf^gjl`]KY^]lqg^Da^]YlK]YYf\l`]EYjaf]Hgddmlagf;gfn]flagf&J]_mdYlagfkj]_Yj\af_kY^]lqYf\l`]]fnajgfe]flj]][ll`]gZda_Ylagfkmf\]jl`]k]conventions.

Australia has recently announced that ships containing asbestos or that have not been checked for toxic kmZklYf[]k[gmd\Z]lmjf]\YoYq^jge9mkljYdaYfk`gj]k&Làkkh][a[YddqYhhda]klgkàhkZmadlY^l]j)January 2005.

From 1 January 2013, new requirements apply which prohibit the discharge of garbage waste into the sea ^jgekàhk$]p[]hlafn]jqdaeal]\[aj[meklYf[]k&EYjaf]Fgla[].'*()*gmldaf]kl`]k][`Yf_]k$Yegf_others in relation to revised garbage discharge regulations for ships.

5.2.5 Australian Maritime Safety AuthorityL`]9mkljYdaYfEYjalae]KY^]lq9ml`gjalq 9EK9!akl`]fYlagfYdkY^]lqj]_mdYlgj^gjYdd[gee]j[aYdkàhhaf_in Australian waters.

5.2.6 The National Plan9EK9eYfY_]k9mkljYdaYkFYlagfYdHdYflg;geZYlHgddmlagfg^l`]K]YZqGadYf\Gl`]jFgpagmkYf\@YrYj\gmkKmZklYf[]k FYlagfYdHdYf!Yf\ogjcklg_]l`]joal`KlYl]'Fgjl`]jfL]jjalgjq FL!governments, and the shipping, oil and chemical industries and emergency services to maximize Australias marine pollution response capability.

The National Plan provides a national framework for responding to marine pollution incidents. The aim of the National Plan is to protect the natural and built environments of Australias marine and foreshore zones from the adverse effects of oil and other noxious or hazardous substances spilled into the marine environment. It also aims to minimize those effects where protection is not possible.

9j]na]og^9mkljYdaYkFYlagfYdHdYfYf\FYlagfYdEYjalae]=e]j_]f[qJ]khgfk]9jjYf_]e]flk FE=J9!oYk[gehd]l]\\mjaf_*())&L`]c]qgml[ge]akl`Yll`]FYlagfYdHdYfYf\l`]FE=J9oaddZ]afl]_jYl]\aflga single emergency response arrangement; however, these changes will take time to implement.

5.3 Registration5.3.1 Registration requirements

The Australian Register of Ships currently lists the particulars of some 7,000 active ships. All Australian-owned commercial ships of 24 meters and over in tonnage length, capable of navigating the high seas, must be registered.

9ddgl`]j[jY^l$af[dm\af__gn]jfe]flkàhk$kàf_Yf\hd]Ykmj][jY^l$f]]\fglZ]j]_akl]j]\$ZmleYqZ]if the owners desire. In this regard, an Australian citizen or body corporate established under Australian corporate law can apply to have a ship registered, provided it is: D]kkl`Yf)*e]l]jkafd]f_l`gn]jYddYf\o`gddqgof]\gjgh]jYl]\Zq9mkljYdaYfj]ka\]flkgjZq

Australian nationals and residents together Gf\]eak] ZYj]ZgYl![`Yjl]jlgYf9mkljYdaYf%ZYk]\gh]jYlgj Gof]\af[geegfo`]j]egj]l`Yf`Yd^l`]k`Yj]kYj]gof]\Zq9mkljYdaYffYlagfYdkFlagging

J]_akl]j]\[gee]j[aYdkàhkgn]j*,e]l]jkaflgffY_]d]f_lèmklql`]9mkljYdaYfJ]\=fka_f&9ddgl`]jj]_akl]j]\kàhk`Yn]l`][`ga[]g^qaf_]al`]jl`]fYlagfYdY_gjl`]J]\=fka_f&9fmfj]_akl]j]\9mkljYdaYf%gof]\kàh[YfZ]akkm]\oal`Y[]jla[Yl]]flaldaf_allgq]al`]jY_&Registration

A ship must be registered if the owner intends to use it for travel from Australia to places outside Australia,


or on voyages from foreign ports to Australia or other overseas destinations. Any ship demise chartered to Australian-based operators, or any craft under 12 meters in length, owned or operated by Australian j]ka\]flk$fYlagfYdkgjZgl`$[YfZ]j]_akl]j]\a^l`]gof]j'gh]jYlgjoak`]k&After registration

Gf[]Yk a`h` YkZ]]fj]_akl]j]\$l`]gof]j'j]_akl]j]\Y_]flemkl[gehdqoal `l`]jmd]kdYa\\gofafZgl `l`]law and regulations. So that the register can be kept up to date, the registrar must be informed of the following: Aâlakafl]f\]\lg[`Yf_]l`]fYe]gj`ge]hgjlg^l`]kàhgja^l`]j]akYfq[`Yf_]afl`]fYe]gj

address of the owner or registered agent A^l`]kàhgjYk`Yj]afl`]kàhakkgd\ A^YfqYdl]jYlagfkYj]eY\]lgl`]kàh A^l`]j]Yj][`Yf_]klgYfqj]_akl]j]\egjl_Y_]k A^l`]J]_akljYlagf;]jla[Yl]akdgklgj\]kljgq]\ A^l`]kàhakdgklgj\]kljgq]\L`]dYohjgna\]k`]Ynqh]fYdla]kaf[dm\af_f]kYf\hjakgfk]fl]f[]k^gjgof]jk'j]_akl]j]\Y_]flko`g\gfgl[gehdqoal`l`]j]_akljYlagfjmd]k&L`]jmd]kYhhdqmfladYkàh`YkZ]]fj]egn]\^jgel`]j]_akl]j^gj]pYehd]$l`jgm_`dgkkgjY^l]jal`YkZ]]fkgd\lg^gj]a_ffYlagfYdk&Afl`][Yk]g^kàhkl`YlYj]fglj]imaj]\to be registered, the registered owner may remove the ship from the register at any time.

5.3.2 Ship registration procedureShips that were originally registered in Australia under the British system (i.e., before 1982) were automatically transferred to the new register subject to nationality eligibility at the time of changeover.

9hhda[Ylagfk[YfZ]eY\]afh]jkgfgjl`jgm_`l`]eYadYll`]Kàhhaf_J]_akljYlagfG^[]af;YfZ]jjYgjYlYfqg^[]g^9EK9&9kl`]j]_akljYlagfg^Ykàh_an]k_gg\lald]lgl`]gof]jk$YfYhhda[Ylagf^gjj]_akljYlagfmust be accompanied by the following: 9hhda[Ylagf

Australia

20

5.4 General commentsBunker duty

A vessel on an international voyage is eligible to purchase bunkers duty-free. An international voyage means l`Yll`]gof]j'eYkl]jafl]f\k^gjl`]kàhlg\]hYjl9mkljYdaYYf\hjg[]]\\aj][ldqgjaf\aj][ldqlgYhdY[]outside Australia. This is best illustrated in the examples below: 9ngqY_]g^Yn]kk]dYjjanaf_afYf\\]hYjlaf_^jge9mkljYdaYYlYkaf_d]hgjlj]eYafkYfafl]jfYlagfYd

voyage. 9ngqY_]g^Yn]kk]d[Yjjqaf_afl]jfYlagfYd[Yj_g^gj\ak[`Yj_]YlYfmeZ]jg^9mkljYdaYfhgjlkYf\l`]f

departing from Australia remains an international voyage. 9ngqY_]g^Yn]kk]d[mjj]fldq]f_Y_]\afeYcaf_afl]jfYlagfYdngqY_]kYf\gfalkafl]jfYlagfYdk[`]\md]

loading no more than 10% of the vessels deadweight tonnage with Australian coastal cargo remains an international voyage. If more than 10%, the voyage is not part of an international voyage.

9j]hgkalagfaf_ngqY_]g^Yn]kk]d]kh][aYddqlgdgY\9mkljYdaYf[gYklYd[Yj_gakfglhYjlg^Yfafl]jfYlagfYdvoyage.

9j]hgkalagfaf_ngqY_]g^Yn]kk]d$o`]j]l`]afl]flagfYll`]lae]g^d]Ynaf_l`]hgjlZ]af_j]hgkalagf]\from was to proceed to the reposition port to load cargo which it will carry to a place outside Australia,is part of an international voyage.

9j]hgkalagfaf_ngqY_]o`]j]alakfglcfgofYll`]lae]g^d]Ynaf_l`]hgjlZ]af_j]hgkalagf]\^jgeo`]l`]jthe ship will be loading cargo which it will carry to a place outside Australia is not part of an international voyage.

A place outside Australia does not include: 9kàhgjYfYj]YgôYl]jgmlka\]9mkljYdaY 9fafklYddYlagfgmlka\]9mkljYdaY 9j]]^gjYfmfaf`YZal]\akdYf\gmlka\]9mkljYdaY OYl]jkYf\afklYddYlagfkafl`]BH


at sea (within a countrys exclusive economic zone) are required to have an onboard Ship-To-Ship Transfer HdYfYhhjgn]\Zql`]>dY_KlYl]9\eafakljYlagf&Fgla[YlagfemklYdkgZ]_an]fYld]Ykl,0`gmjkhjagjlgthe commencement of oil transfer operations. It is noted that bunker operations are excluded from these Ye]f\e]flkYko]ddYkp]\Yf\gYlaf_g^^k`gj]hdYl^gjek&On 25 September 2012, the Maritime Legislation Amendment Act 2012 received Royal Assent.

L a`k9[laehd]e]fl]\Ye]f\e]flklgE9JHGDo a`[ `]fl]j]\aflg^ gj[]gf)BYfmYjq*()+Yf\oadd2 Aehgk]f]oj]klja[lagfkgfl`]\ak[`Yj_]g^k]oY_]^jgehYkk]f_]jk`ahkafkh][aYdYj]Ykg^

the sea which are particularly sensitive or vulnerable to pollution

Klj]f_l`]fl`]j]_mdYlagfkj]dYlaf_lgl`]\akhgkYdZqk`ahkg^_YjZY_]Ylk]Y EYc]eYf\Ylgjql`][mjj]flngdmflYjq=f]j_q=^[a]f[q

Australia

22


Barbados1. Tax1.1 Tax facilities for shipping companies

Barbados legislation provides three different corporate vehicles that can be used for shipping activities. The lYpaf[]flan]kYj]Zja]qgmldaf]\Z]dgo2Kàhhaf_[gjhgjYlagfkaf[gjhgjYl]\mf\]jl`]Kàhhaf_;gjhgjYlagf9[l l`]K;9!Yj]daeal]\lg[Yjjqaf_gfthe following activities:

LggofYf\'gjgh]jYl]kàhk To do such other things as are necessary and incidental to the ownership and operation of such ships To hold shares or other equity interests in foreign entities that are established for the purpose of owning

Yf\'gjgh]jYlaf_kàhkShipping corporations may carry on business, conduct their affairs and exercise their powers in any jurisdiction outside Barbados.

A company incorporated under the SCA is not subject to corporate tax in Barbados. In addition, Barbados does not impose tax on capital gains.

Shipping corporations are exempt from withholding tax on most payments made to nonresidents.

Afl]jfYlagfYd:mkaf]kk;gehYfa]k A:;!da[]fk]\mf\]jl`]A:;9[l[gf\m[lYoa\]jYf_]g^Zmkaf]kkactivities but must not do business within Barbados.

IBCs are liable to corporate tax on their worldwide income at the following rates:

*&-(gfYddhjglkYf\_YafkmhlgMK-$((($((( *&((gfYddhjglkYf\_Yafk]p[]]\af_MK-$((($(((Zmlfgl]p[]]\af_MK)($((($((( )&-(gfYddhjglkYf\_Yafk]p[]]\af_MK)($((($(((Zmlfgl]p[]]\af_MK)-$((($((( (&*-gfYddhjglkYf\_Yafkaf]p[]kkg^MK)-$((($(((IBCs may elect to take a credit in respect of taxes paid in a country other than Barbados. This credit cannot j]\m[]l`]lYphYqYZd]af:YjZY\gklgYjYl]d]kkl`Yf(&*-gfl`]hjglkYf\_Yafk^gjYfaf[ge]q]Yj&IBCs are exempt from withholding tax on management fees, royalties, interest, dividends and fees paid to a nonresident. No tax is imposed in respect to the transfer of most assets.

IBCs have access to most of the Barbados tax treaties.

J]_mdYj:YjZY\gk;gehYfa]k J:;!af[gjhgjYl]\mf\]jl`]:YjZY\gk;gehYfa]k9[l l`]:;9!Yf\lYpresidents in Barbados are liable to corporate tax on their worldwide income at the rate of 25%.

RBCs can be used to provide qualifying overseas professional services to residents outside the Caricom eYjc]l&Mf\]j:YjZY\gk\ge]kla[lYpd]_akdYlagf$l`]l]jeimYda^qaf_gn]jk]Ykhjg^]kkagfYdk]jna[]kincludes, among others, shipping activities.

When income is derived from the provision of qualifying overseas professional services, in computing the tax payable on such income, a foreign currency earning credit (FCEC) would be applied against the tax otherwise payable. The application of the FCEC can reduce the effective corporate tax rate to as low as 1.75%.

Dividends made by an RBC out of foreign-sourced income are exempt from withholding tax in Barbados. J:;k[YfZ]f]l^jgeYddl`]:YjZY\gklYplj]Yla]k&

1.2 Tax facilities for seafarers No personal tax or social security obligations should arise.

Barbados

24

1.3 Tax treaties and place of effective managementBarbados has entered into tax treaties with the following countries:Austria, Botswana, Canada, CARICOM, China, Cuba, Czech Republic, Finland, Iceland, Luxembourg, Malta, Mauritius, Mexico, Netherlands, Norway, Panama, Seychelles, Spain, Sweden, Switzerland, United Kingdom, United States, Venezuela.

:YjZY\gk`YkYdkgka_f]\lj]Yla]koal`l`]^gddgoaf_[gmflja]kl`Yl`Yn]q]llg[ge]af^gj[]2:Y`jYaf$?`YfY$IYlYj$Hgjlm_Yd$KYfEYjafg:YjZY\gk`Ykka_f]\ZadYl]jYdafn]kle]fllj]Yla]koal`l`]^gddgoaf_[gmflja]k2;YfY\Y$;àfY$;mZY$EYmjalamk$Mfal]\Caf_\ge$Mfal]\KlYl]k$N]f]rm]dY&

1.4 Freight taxesBarbados does not levy freight taxes.

)&- Kh][aYdn]kk]dj]_akljYlagfZ]f]lk^gjl`]kàhgof]jkL`]j]Yj]fglYpj]_akljYlagfZ]f]lk&

1.6 Changes to tax law anticipated in the near futureNo changes are expected in the near future.

2. Human capital2.1 Formalities for hiring personnel

L`]:YjZY\gkKàhhaf_9[l l`]:K9!\g]kfglaehgk]j]klja[lagfkgfl`]fYlagfYdalqg^l`]eYkl]j$g^[]jkgjcrew. No work permit is required.

The master of every Barbadian ship shall enter into an agreement with every seaman whom he engages as one of his crew. Crew agreements should be in accordance with the provisions of the BSA and in the form \]l]jeaf]\Zql`]Hjaf[ahYdJ]_akljYj$o`gakZYk]\afDgf\gf&Mhgfl`]]p][mlagfg^Y[j]oY_j]]e]fl$l`]eYkl]jk`Yddaf^gjel`]Hjaf[ahYdJ]_akljYjg^l`]fYe]$_jY\]Yf\fmeZ]jg^l`][]jla[Yl]Yf\]f\gjk]e]flg^]Y[`g^[]j]ehdgq]\gfl`]kàh$af[dm\af_àek]d &^

2.2 National labor lawCrew members of Barbadian ships are subject to the provisions of the BSA.

2.3 Regulations on employing personnelG^[]jkemkl`gd\]al`]jY[]jla[Yl]gjYf]f\gjk]e]flakkm]\mf\]jl`]:K9g^Y_jY\]YhhjghjaYl]lgl`]ajjYfc&JYlaf_kemklgZlYafY[]jla[Yl]g^[geh]l]f[q^jgel`]Hjaf[ahYdJ]_akljYj&G^[]jkYf\jYlaf_kemkl`gd\YnYda\e]\a[Yd[]jla[Yl]g^[geh]l]f[q[gehdqaf_oal`l`];gfn]flagfgfKlYf\Yj\kg^LjYafaf_$;]jla[YlagfYf\OYl[`c]]haf_^gjK]Y^Yj]jk KL;O!/0'1-Yf\YnYda\e]\a[Yd[]jla[Yl]Yddgoaf_l`]akkmYf[]g^l`]:YjZY\gkG^[]jk=f\gjk]e]flDocument.

2.4 Collective labor agreementsThere is no obligation to have a collective labor agreement.

2.5 Manning issues of registering a ship in BarbadosThe manning scale for the size and type of ship is subject to the approval of the Principal Registrar, who will issue l`]EafaemeKY^]EYffaf_;]jla[Yl]&


3. Corporate structure3.1 Most commonly used legal structures for shipping activities

The most commonly used legal structures for the operation of shipping activities are the Shipping Corporations and IBCs. The RBC structures have been recently introduced in legislation. This vehicle is ]ph][l]\lgZ]hghmdYjafl`]^mlmj]\m]lgl`]^Y[ll`YlalimYda]k^gjlj]Ylqhmjhgk]k&

+&* LYpYlagfg^hjglk\akljaZmlagfMf\]j\ge]kla[dYo$l`]j]akfglYpYlagfgfhjgl\akljaZmlagfk\]jan]\^jge^gj]a_f%kgmj[]\af[ge]$gl`]jthan portfolio investment.


There are no subsidies for shipping companies.

4.2 Investment incentives for shipping companies and the shipbuilding industryThere are no investment incentives.

4.3 Special incentives for environmental awareness There are no special incentives for environmental awareness.

,&, Akkm]koal`qaf_l`]:YjZY\gkY_L`]:YjZY\gkY_]fbgqkl`]klYlmkg^Z]af_gfl`]HYjakE]egjYf\meg^Mf\]jklYf\af_gfHgjlKlYl];gfljgd EGM!O`al]DaklYf\l`]MK;gYkl?mYj\IM9DK@AH*)$l`]j]Zqd]kk]faf_l`][gfljgdkgfk`ahkqaf_l`]:YjZY\gkY_&

4.5 Major changes in shipping subsidy legislation in the near futureNo major changes are expected in the near future.

5. General Information5.1 Infrastructure5.1.1 Major ports

Deep Water Harbour Port St. Charles Port Ferdinand

5.1.2 Port facilitiesThe following facilities are available:

Stevedoring Storage Tugboats Da^lkYf\[jYf]k Bunkering Fresh water ?YjZY_]\akhgkYd E]\a[Ydk]jna[]k

26

Barbados

5.1.3 Airport close to the major portsThe international airport of Barbados is located approximately a 20-minute drive from the Deep Water Harbour and approximately a 45-minute drive from Port St. Charles and Port Ferdinand.

5.1.4 Support services for shipping industry Ship agents Surveyors EYjalae]dYok]jna[]k9dl`gm_`:YjZY\gkZYfck\gfgl`Yn]kh][aYdar]\kàhhaf_\]kck$l`]:YjZY\gkZjYf[`]kgô]dd%]klYZdak`]\international banks are equipped to deal with shipping companies.

5.1.5 Maritime educationEYjalae]]\m[Ylagfakhjgna\]\Zql`];YjaZZ]YfEYjalae]Afklalml]dg[Yl]\afCaf_klgf$BYeYa[Y&Làkafklalmlagf`YkZ]]fj][g_far]\Zql`];YjaZZ]Yf;geemfalq ;9JA;GE!Ykl`]d]Y\af_[]fl]j^gjeYjalae]education, training, research and consultancy.

5.2 Safety and environmental issues5.2.1 Implementation of the International Safety Management Code on board vessels

Owners and managers of Barbados-registered ships of 500 gross registered tons or more are required to [gehdqoal`l`]Afl]jfYlagfYdKY^]lqEYfY_]e]fl;g\] AKE!;g\]&

5.2.2 Safety rules regarding manningL`]kY^]lqjmd]kj]_Yj\af_eYffaf_eYqZ][`YjY[l]jar]\Ykimal]klja[l&Egklg^l`]eYjalae]d]_akdYlagf(particularly on safety issues) is set out in the BSA and regulations made under the same Act.

5.2.3 Special regulations on safety and the environment:YjZY\gkakhYjlqlgegklAfl]jfYlagfYdEYjalae]Gj_YfarYlagf AEG![gfn]flagfkgfkY^]lqYf\l`]environment. In addition, Barbados enacted the Shipping Oil Pollution Act (SOPA), which establishes a code of regulations, enforcement procedures and liabilities for the discharge of oil anywhere in the world by Barbados-registered ships.

5.3 Registration5.3.1 Registration requirements

L`]`]Y\imYjl]jkg^l`]:YjZY\gkEYjalae]KàhJ]_akljq :EKJ!Yj]ZYk]\afDgf\gf$=f_dYf\&L`]hjg[]\mj]^gjj]_akljYlagfg^kàhkmf\]jl`]:YjZY\gkY_akkaehd]Yf\kljYa_`l^gjoYj\&9kàhimYda]k^gjj]_akljYlagfaâlakgof]\ZqYfaf\ana\mYdo`gakY:YjZY\gkgjY;9JA;GE[alar]f$gjY[gehYfqaf[gjhgjYl]\af:YjZY\gkgjaf;9JA;GE&AfY\\alagf$^gj]a_f%_gaf_kàhkYf\f]Yj[gYklYdljY\]ships of 150 gross registered tons or more may, regardless of the nationality of the owners, be approved for registration.

L`]:EKJgh]jYl]kYk]hYjYl]QY[`lJ]_akljqgh]flgYddqY[`lk[Yjjqaf_)*h]jkgfkgj^]o]j&Ships older than 20 years are restricted from registration.

5.3.2 Ship registration procedureProvisional registration:

HjgnakagfYd;]jla[Yl]keYqZ]akkm]\Zql`]Hjaf[ahYdJ]_akljYjgjZqYfqJ]_akljYjYhhgafl]\Zqàeafdifferent ports around the world.

Afgj\]jlggZlYafYHjgnakagfYd;]jla[Yl]$l`]gof]jkk`Yddhjgna\]l`]^gddgoaf_2 ;]jla[Yl]g^J]_akljYlagf Notice of Name proposed for a Barbados ship


Particulars of the ship ;gha]kg^:addg^KYd]gj:mad\]jk;]jla[Yl] Copies of the incorporation documents of owner Details of the master ;gfjeYlagfg^;dYkkL`]HjgnakagfYd;]jla[Yl]oaddZ]nYda\^gjYh]jag\g^kapegfl`k^jgel`]\Yl]g^akkm]&

28

Barbados

5.3.5 International Conventions:YjZY\gkakY[gfljY[laf_hYjlqlgYddeYbgjAEG[gfn]flagfk&

5.3.6 MortgagesA registered ship or share in a registered ship may be security for a loan or other valuable consideration, and on the production of the prescribed mortgage, the Principal Registrar shall record it in the register.Mortgages shall be recorded in the order in time in which they are produced to the Principal Registrar.

DgYfkYf\egjl_Y_]k[YfZ]j][gj\]\\mjaf_l`]hjgnakagfYdj]_akljYlagfklY_]&

29 Shipping Industry Almanac 2013

Belgium1. Tax1.1 Special tax facility for shipping companies: the tonnage tax regime

The law of 2 August 2002 introduced a special tax regime for shipping companies (tonnage tax). The law of 27 December 2004 adapted this special regime in light of remarks made by the European Commission (EC). This initiative aims to make Belgian shipping more competitive in the global market by creating a positive k[Yd]fnajgfe]flafdaf]oal`gl`]jeYbgjeYjalae][gmflja]k&AlYdkgYaeklghj]k]jn]Yf\j]klgj]=mjgh]YfMfagf =M!eYjalae]]ehdgqe]flYf\cfgo%`go&Qualifying operations for this regime are those that are engaged in the exploitation of seagoing vessels for l`]ljYfkhgjlg^_gg\kgjh]jkgfkafafl]jfYlagfYdljY^[$Yko]ddYk^gjl`]]phdgjYlagfg^fYlmjYdj]kgmj[]kYlk]Y&>mjl`]jegj]$l`]hjglgZlYaf]\^jgel`]gh]jYlagfg^Yn]kk]doal`Y[]jla[Yl]g^j]_akljq^gjl`]performance of towing operations, the performance of assistance and other activities at sea, as well as all operations that are directly connected with the abovementioned operations, qualify.

Afgj\]jlgZ]YZd]lgZ]f]l^jgel`]:]d_aYflgffY_]lYpj]_ae]$a&]&$lgZ]]da_aZd]lg`Yn]hjglk^jgeocean shipping taxed on a lump-sum basis (according to Article 115, 2, 2 of the law of 2 August 2002), the Belgian company or branch:Y! EmklZ]l`]gof]j$[g%gof]jgjZYj]ZgYl[`Yjl]j]jg^Yk]Y_gaf_n]kk]dl`YlakeYfY_]\lgY

considerable extent in Belgium and not bareboat-chartered out to a third partyOrZ! EmklZ]]f_Y_]\afl`][j]oYf\l][`fa[Ydkàhhaf_eYfY_]e]fl^gjlàj\%hYjlqgof]jk a&]&$[Yjjqaf_

out the commercial management in Belgium for another taxpayer), provided that the ship managers are entrusted with both the management of the entire crew and the technical management of the seagoing vessel(s), and the company takes over the full responsibility from the owner of the vessels operation and all the duties and responsibilities regarding safety and pollution

Or[! Emkl`Yn][`Yjl]j]\k]Y_gaf_n]kk]dkgfYlae][`Yjl]jgjngqY_][`Yjl]jZYkakIn the case of b) and c), respectively, the annual total of the net daily tonnages of the seagoing vessels for which the commercial manager acts, or of the chartered vessels, may not contribute more than three times the annual total of the net daily tonnages of the vessels that he or she manages as owner, co-owner or bareboat charterer. Jointly owned or bareboat-chartered seagoing vessels are included in the overall tonnage if the co-ownership or co-chartering is at least 5%.

Also, ship managers (this refers to the management of a seagoing vessel for the account of third parties and [gf[]jfkl`]l][`fa[YdeYfY_]e]flYf\'gjl`]kmhhdqg^[j]o!Z]f]l^jgel`]kYe]hjgl[Yd[mdYlagf$but the regulation is reserved for taxpayers whose sole activity is the management of ocean-going vessels. 9^mjl`]jj]imaj]e]flakl`YlYld]Ykl/-g^l`]fmeZ]jg^n]kk]dkeYfY_]\^gjlàj\hYjla]kk`gmd\ql`]:]d_aYfY_&As already stipulated above and according to Article 115, 2, 2 of the law of 2 August 2002, seagoing n]kk]dk`Yn]lgZ]eYfY_]\lgY[gfka\]jYZd]]pl]flaf:]d_ame&EYfY_]e]flj]^]jklgl`]eYafresponsibility for the activities, including: ;gf[dm\af_Y_j]]e]flk[gf[]jfaf_l`]kàh LYcaf_[Yj]g^l`]kàhkkmhhda]k LYcaf_[Yj]g^l`]kàhkeYafl]fYf[] =fl]jaf_aflgafkmjYf[][gfljY[lk C]]haf_l`]Y[[gmflk >mdddaf_Y\eafakljYlan]^gjeYdala]k

30

Belgium

9hhgaflaf_eYkl]jkConsiderable extent indicates that the taxpayer carries out most activities or that he or she has them carried out under his or her authority.

To this end, the Royal Belgian Shipowners Association has developed a self-assessment matrix, which has also been adopted by the Belgian tax authorities. This self-assessment matrix can be used as a guideline or tool to verify compliance with the requirement of ship management to a considerable extent in Belgium.

LàkeYljapak\ana\]\aflgl`j]][gehgf]flk&L`]k]eYfY_]e]fl]d\kYj] a!kljYl]_a[Yf\[gee]j[aYdeYfY_]e]fl$ aa!l][`fa[YdeYfY_]e]flYf\ aaa![j]oeYfY_]e]fl&EYfY_]e]flaf[dm\]kfglgfdqcontrol, but also requires the execution of certain tasks. The management can be performed in Belgium by the owner, co-owner or bareboat charterer of the seagoing vessel(s) (the Belgian shipping company) or can be subcontracted to a Belgian company.

>mjl`]jegj]$oalàfl`]j]kh][lan]eYfY_]e]fl]d\k$o]a_àf_^Y[lgjkYj]Ykka_f]\lgl`]nYjagmklYkcklgZ]]p][ml]\&=Y[`]d\gêYfY_]e]flj]hj]k]flkYlglYdk[gj]g^YeYpaemeg^)*hgaflk&9fY\bmkle]flfactor with regard to employment in Belgium is incorporated and added to the self-assessment matrix. The aforementioned adjustment factor is capped at a maximum of 10% of the total score of 36 points and amounts to 0.02 per Belgian employee.

L`]eYljapl`]j]^gj]oadd]fYZd]l`]mk]jlgn]ja^q[gehdaYf[]oal`Ydd[jal]jaYYf\]d\kgêYfY_]e]flafBelgium.

The tonnage tax regime was proposed as an alternative to the normal corporate income tax regime for shipping companies resident in Belgium or the Belgian permanent establishments of shipping companies resident in other states. It is possible for existing companies to opt for the tonnage tax at any time, but once they have opted for the regime, it remains applicable for at least 10 years, unless the activity ceases before the 10-year h]jag\` YkdYhk]\&L`]j]_ae]oaddZ]_jYfl]\Ykg ^l`]jkl\Yqg ^l`]Zmkaf]kkq]Yj^ gddgoaf_l`]q]Yj\mjaf_o a`[ `Y^ gjeYdj]im]kloYkd]\&9^l]j)(q]Yjk$l`]lgffY_]lYpj]_ae]akYmlgeYla[Yddqj]f]o]\$mfd]kkl`]company gives notice to the authorities at least 3 months before the end of the 10th year.

It is also possible for existing companies to create a separate shipping division whenever they opt for tonnage tax for their shipping activities besides other (non-shipping) activities.

L`]dmeh%kmepYlagfg^l`]hjglakZYk]\gfYfYegmflh]jn]kk]d$h]j\YqYf\h]j)((f]llgfk2

L`]gf]%g^^hjgloaddZ]kmZb][llgl`]:]d_aYf[gjhgjYl]lYpjYl]g^++&11&The tariff for vessels exceeding 40,000 tons, which is lower than in many other countries, can be applied only in the following cases: >gjf]odqZmadlk]Y_gaf_n]kk]dk >gjk][gf\`Yf\n]kk]dkd]kkl`Yfn]q]Yjkgd\l`Ylo]j] h]jeYf]fldq!j]_akl]j]\afYfgf%=ME]eZ]j

State >gjk][gf\`Yf\n]kk]dkgd\]jl`Yfn]q]Yjkl`Ylo]j]j]_akl]j]\afYfgf%=ME]eZ]jKlYl]\mjaf_l`]

n]q]YjkZ]^gj]l`]lYpq]Yjafoà[`l`]kh][aYdlgffY_]lYpj]_ae]oaddZ]Yhhda]\

Total net tonnage Income per day per 100 tons ()

Mhlg)$((( 1.00)$(())($((( 0.60)($(()*($((( 0.40*($((),($((( 0.20

Over 40,000 0.05


As tonnage tax is an alternative to normal income tax, depreciation, capital gains and capital losses are included. Consequently, companies planning an investment should evaluate whether they should opt aee]\aYl]dq^gjlgffY_]lYpgjafalaYddqZ]f]l^jgeafn]kle]fl\]\m[lagfYf\Y[[]d]jYl]\\]hj][aYlagf k]]infra point 1.2) and enter the tonnage tax regime only after a few years.

Neither carried forward losses nor losses in another division (that is, engaged in a business that does not imYda^q^gjl`]lgffY_]lYpj]_ae]![YfZ]k]lg^^Y_Yafkll`]dmeh%kmehjglg^l`]kàhhaf_\anakagf&Carried forward losses will be frozen until exiting the regime.

The tonnage tax regime is effective as of 1 January 2003.

1.2 Tax facilities for shipping companies: in the normal and the alternative tax regimeIn the margin of the tonnage tax regime, an alternative regime for operations engaged in the shipping Zmkaf]kkoYk[j]Yl]\Zql`]dYog^*9m_mkl*((*&Làkj]_ae]$Yhhjgn]\Zql`]=M$[Ye]aflg^gj[]gf)January 2003. Accelerated depreciation

Seagoing vessels may use accelerated depreciation over their useful economic lives, generally over a period of eight years. Depreciation may be calculated on a straight-line basis. The straight-line rates are: >gjf]odqZmadlk]Y_gaf_n]kk]dk l`]^gddgoaf_jYl]kYj]hjgna\]\ZqdYo!2 %*(^gjl`]jklfYf[aYdq]Yj %)-^gjl`]k][gf\Yf\làj\fYf[aYdq]Yjk %)(^gjkmZk]im]flq]Yjk >gjk][gf\`Yf\k]Y_gaf_n]kk]dkl`YlYj]Y[imaj]\^gjl`]jkllae]ZqY:]d_ame%ZYk]\lYp

payer (the following rates are provided by law): %*(^gjl`]jklfYf[aYdq]Yj %)-^gjl`]k][gf\Yf\làj\fYf[aYdq]Yjk %)(^gjkmZk]im]flq]Yjk >gjgl`]jk][gf\`Yf\n]kk]dk l`]^gddgoaf_jYl]ake]flagf]\afl`][gee]flkakkm]\Zq

the tax authorities on the Income Tax Code): %)(Yq]YjThe declining balance method is not allowed for vessels that are depreciated according to the rates provided by law. It is still applicable to the other vessels, but the Belgian legislature has imposed a restriction: the maximum depreciation is twice the depreciation of the straight-line method. Tax exemption of capital gains

In order not to discriminate between companies that have opted either for or against tonnage tax, the law of 2 August 2002 also provides for a deferred taxation of the capital gains realized on seagoing vessels if certain conditions are complied with. These conditions are largely congruent with those mentioned in Article ,/g^l`]:]d_aYfAf[ge]LYp;g\] Yegf_gl`]j[gf\alagfk$n]kk]dkemkl`Yn]Z]]fgof]\^gjYld]Ykln]q]Yjk$emkl`Yn][gehmdkgjqj]afn]kle]floalàfn]q]YjkYf\[gehmdkgjqj][gj\af_g^l`][YhalYd_Yafgfa blocked reserve account).Investment deduction

The law of 2 August 2002 provides for a new rate of investment deduction, i.e., 30% of the acquisition nYdm]g^f]on]kk]dkgjk][gf\`Yf\n]kk]dkl`YlYj]Y[imaj]\^gjl`]jkllae]ZqY:]d_aYf[gehYfq&L`]investment deduction is an investment incentive that operates by decreasing (at once) the corporate income taxable base of the operation that is making the investment by a certain percentage of the acquisition value of the assets that have been acquired during the business year. Alternatively, the deduction can be operated as a certain percentage on annual depreciations.Notional interest deduction

L`]:]d_aYfLYpDYog^**Bmf]*((-afljg\m[]\l`]kg%[Ydd]\jakc[YhalYd\]\m[lagf$Ydkgj]^]jj]\lgYkl`]

32

Belgium

fglagfYdafl]j]kl\]\m[lagf$o`a[`lggc]^^][lYkg^l`]lYpq]Yj*((/fYf[aYdq]Yjh]j+)mjl`]jegj]$Y:]d_aYfN9L]p]ehlagfakYdkgmf\]j[]jlYaf[gf\alagfkYhhda[YZd]lgl`]^gddgoaf_kmhhda]k2 L`]eg\a[Ylagf$j]hYaj$eYafl]fYf[]$`ajaf_Yf\[]jlYafgl`]jk]jna[]kj]f\]j]\af\aj][l[gff][lagf


with seagoing vessels ?gg\k\]klaf]\^gjl`]hjgnakagfaf_g^[]jlYafk]Y%_gaf_n]kk]dk ZgYj\hjgnakagfkkmhhda]\lgn]kk]dk^gj

[gYklYdkàf_Yf\ZYj_]k^gjafdYf\[gee]j[aYdfYna_YlagfYj]]p[dm\]\! K]jna[]kmk]\afl`]^jYe]ogjcg^]p]ehlljYfkhgjlg^_gg\k$km[`Ykl`]dgY\af_$mfdgY\af_$ljYfk^]j$

packing, weighing, examination and receiptAfgj\]jlgYhhdq egklg^!l`]YZgn]e]flagf]\N9L]p]ehlagfk$[]jlYaf^gjeYdala]k`Yn]lgZ]^mddd]\ l`]recipient must provide the supplier with an order document including certain wordings).

All the above-mentioned VAT exemptions allow the recovery of Belgian input VAT. The VAT exemptions of [gmjk]gfdqYhhdqlgl`]]pl]fll`]hdY[]g^kmhhdqg^l`]ljYfkY[lagfakdg[Yl]\%^jgeN9Lhgaflg^na]oafBelgium. Other VAT facilities

F]pllgl`]YZgn]N9L]p]ehlagfk$l`]j]Yj]k]n]jYde]Ykmj]khmlafhdY[]lg^Y[adalYl]Yf\'gjj]da]n]companies from VAT-related obstacles when distributing goods through Belgium. Import deferral license and VAT warehouse

Import VAT is in principle to be paid at the time of customs clearance. However, Belgium offers the opportunity to defer the payment of import VAT to the VAT return.

O`]j]Yk[gehYfa]kaehgjlaf__gg\kafl`]hYkl`Y\lgeYc]Y[Yk`\]hgkalafgj\]jlgZ]f]l^jgel`]import VAT deferment scheme, the Belgian government has decided to abolish, as of January 1, 2013, the mandatory cash deposit.

9kYj]kmdl$[gehYfa]kk`gmd\fgdgf_]jZ]Yjl`][gklg^hj]%fYf[af_aehgjlN9Lo`]f[mklgek[d]Yjaf_goods in Belgium.

Furthermore, in Belgium there is also the possibility to trade goods under a warehouse regime. When certain conditions are met, goods can be traded under a VAT warehouse without having to charge Belgian VAT. Fiscal representation under a global VAT number

In Belgium companies performing imports and subsequent supplies do not require an individual Belgian VAT registration as such. Provided certain conditions are met, such transactions can be reported to the VAT authorities using a so-called global VAT number of a forwarding company or customs broker. Harbor fees

Exemption from harbor fees is possible, but it depends on negotiations with the port authorities and often depends on job-creating potential.Registration dties

The law of 2 August 2002 provides for an exemption from registration duties on mortgages on vessels. Only Y*-j]_akljYlagflYpakd]na]\&Làkj]\m[lagfgfdqYhhda]klgk]Y_gaf_n]kk]dk&L`]]p]ehlagfak]^^][lan]Ykg^1EYq*((+&

1.4 Tax facilities for seafarersThere are no special tax facilities for seafarers (there are, however, certain incentives for their employers; see sections 1.1 and 1.2). In this respect, we further refer to point 2.6.

1.5 Tax treaties Belgium has concluded more than 89 treaties based on the Organisation for Economic Co-operation and Development (OECD) model treaty for the avoidance of double taxation.

Afhjaf[ahd]$l`]hdY[]g^]^^][lan]eYfY_]e]fl\]l]jeaf]kY[gmfljqkja_`llglYphjglkgâfl]jfYlagfYdshipping operations. The place where the business is actually managed or where the administration is carried out is the decisive factor. It is normally the state where the enterprise operating the vessel resides. If the place g^]^^][lan]eYfY_]e]flakfgll`]kYe]klYl]Ykl`]klYl]gâf[gjhgjYlagf$hjglkYj]lYpYZd]afl`]klYl]gêffective management.

34

Belgium

L`]j]^gj]$a^Y^gj]a_f[gehYfq`YkYd]_YdZjYf[àf:]d_ame$l`]kàhhaf_hjglk_Yaf]\af:]d_ameZqthis Belgian Branch are taxable in the country when the company is a resident, provided that Belgium has [gf[dm\]\Y\gmZd]lYplj]Ylqoal`làk[gmfljqYf\l`]hjgl^Yddkmf\]j9jla[d]0g^làklj]Ylq&A^l`]hjglkg^l`]:]d_aYfZjYf[`\gfgle]]ll`]hj]nagmk[gf\alagfk$l`]k]hjglkYj]lYpYZd]af:]d_ame&

1.6 Freight taxesNo freight taxes are levied, and no treaties that grant relief from freight tax have been concluded.

)&/ Kh][aYdn]kk]dj]_akljYlagflYpZ]f]lk^gjl`]kàhgof]jL`]j]Yj]fgkh][aYdZ]f]lk^gjl`]kàhgof]j&

1.8 Changes to tax law anticipated in the near futureAs a consequence of the 2012 and 2013 budgetary measures, several changes have been made or are expected to be made to the Belgian tax law in the near future. The changes include, among others: DaealYlagfg^l`]fglagfYdafl]j]kl\]\m[lagf k]]YdkgYZgn]mf\]jhgafl)&*!& 9k^jge)BYfmYjq*()+$l`]f]l[YhalYd_Yafkgfk`Yj]kYj]lYpYZd]Yl(&,)* Yf\lYp]p]ehla^l`]

[gehYfqakYkeYddYf\e]\amekar]\]fl]jhjak] KE=!$a^\ana\]f\kgfkm[`k`Yj]kimYda^q^gjl`]taxation test and the holding period requirement of the participation exemption. If only the holding requirements are not met, capital gains on shares will be taxable at 25%. In all other cases capital gains on shares will be taxable at 33.99%.

L`]klYf\Yj\klYlmlgjqoal``gd\af_lYp]k^gjafl]j]klYf\\ana\]f\kYj]af[j]Yk]\lg*-& Afljg\m[lagfg^Y-2)làf[Yhjmd] gfdq^gjafljY%_jgmhdgYfk!&

1.9 Community customs law =fljqaflg^gj[]g^l`]Mfagf;mklgek;g\]Gf,Bmf]*((0$l`]Eg\]jfar]\;mklgek;g\] E;;!oYkhmZdak`]\afl`]G^[aYdBgmjfYdg^l`]=mjgh]YfMfagf J]_mdYlagfS=;U,-('*((0!lgj]hdY[]l`]]paklaf_;geemfalq;mklgek;g\] ;;;!&L`]E;;oYkk[`]\md]\lg[ge]aflg]^^][lYll`]dYl]klgf*,Bmf]*()+&@go]n]j$af]Yjdq*()*$l`]=mjgh]Yf;geeakkagfY\ghl]\YhjghgkYdlgYe]f\l`]E;;Z]^gj]alk]fljqaflg]^^][l&L`]j][YklhjghgkYdhj]k]jn]kl`]gZb][lan]kg^l`]E;;j]d]nYfllgl`]ljY\]g^_gg\kZjgm_`laflgYf\gmlg^l`][mklgekl]jjalgjqg^l`]Mfagf&L`];geeakkagfklYl]kl`j]]j]YkgfklgY\Yhll`]E;;2 L`]E;;f]]\klgZ]Y\Yhl]\lgl`]hjgnakagfkg^l`]DakZgfLj]Ylq&9kY[gfk]im]f[]$l`]E;;oadd

Z]j]fYe]\Mfagf;mklgek;g\] M;;!Yf\oaddZ]Yda_f]\oal`l`]f]ohjgnakagfkg^l`]DakZgfTreaty concerning delegation of powers and the conferral of implementing powers. This has an impact lgl`]aehd]e]flaf_hjgnakagfkg^l`]E;;$oà[`fgo`Yn]lgZ]khdalZ]lo]]f\]d]_Yl]\Y[lkYf\implementing acts.

L`]M;;akhmjhgk]\lgY\Yhll`][mklgekd]_akdYlagflgl`]]d][ljgfa[]fnajgfe]flg^l`];mklgekAuthorities and the economic operators. However, by June 2013, only a limited number of customs IT systems will be installed.

>afYddq$kge]hjgnakagfkafl`]E;;\Yl]\*((0Yj]fgl[gehdaYfloal`Ye]f\e]flkaehd]e]fl]\kaf[]l`]fgjl`]qk]]e\a^[mdllgaehd]e]fl$]&_&$j]_Yj\af_l`]l]ehgjYjqklgjY_]g^_gg\kgjY[mklgekdeclaration through an entry of data in the declarants records

Authorized economic operator

9fYml`gjar]\][gfgea[gh]jYlgj 9=G![YfZ]\]f]\YkYf][gfgea[gh]jYlgjl`Ylakj]daYZd]l`jgm_`gmlthe community in the context of customs, trade and related operations and therefore is entitled to enjoy [mklgekZ]f]lkYf\ljY\]^Y[adalYlagfkl`jgm_`gmll`][geemfalq&9f9=GYhhda[Yflk`gmd\Z]]klYZdak`]\afl`]=M&H]jeYf]fl]klYZdakè]flk ZjYf[`$kmZka\aYjq!g^fgf%=M[gehYfa]k[YfYdkgYhhdq&The increasing success of AEOs did not come to a halt in 2012. As of July 2013, more than 11,000 European companies successfully obtained the status of AEO. In Belgium, the Customs Authorities have issued 267


9=G[]jla[Yl]k$oà[àkY_jgol`gêgj]l`Yf,(af[gehYjakgflg*())&Mhlgfgo$?]jeYfqYf\l`]F]l`]jdYf\kakkm]\l`]egkl9=G%[]jla[Yl]k&In December 2012, an update of the AEO self-assessment has been published on the Taxation and Customs Mfagf

36

Belgium

have been focusing on protection of intellectual property rights.\!>L9=M%MK9

AfBmf]*()*$l`]=M%MK@a_`%D]n]dOgjcaf_?jgmhgf?jgol`Yf\BgZkhmZdak`]\Yfafl]jaej]hgjlklYlaf_l`YlYf>L9Z]lo]]fl`]=MYf\MKakl`]_j]Yl]klhgl]flaYd^gjkmhhgjlaf_bgZkYf\khmjjaf_][gfgea[_jgolàfZgl`l`]=MYf\MK&Afl`][gmjk]g^l`]MKHj]ka\]flaYd=d][lagfkafl`]^Yddg^*()*$LjY\];geeakkagf]jCYj]dL9=M%Na]lfYe F]_glaYlagfkZ]lo]]fl`]=MYf\Na]lfYeo]j]dYmf[`]\af*()*oal`Yjklf]_glaYlaf_jgmf\afOctober 2012 in Hanoi. Both sides seek for a comprehensive agreement covering tariffs, non-tariff barriers as well as commitments on other trade-related aspects, notably procurement, regulatory issues, competition, services, and sustainable development. However, many challenges are expected in line with other FTA negotiations in the same region.

^!9FL9=M%H]jmYf\;gdmeZaY L`]ljY\]f]_glaYlagfkZ]lo]]fl`]=MYf\;gdmeZaYYf\H]jmo]j]km[[]kk^mddq[gf[dm\]\af*())and the trade agreement was signed in June 2012. Originally, Ecuador was also involved in the trade agreement negotiations, but has withdrawn shortly after the start of the negotiations in 2009. At this moment, the trade agreement is in the process of translation, signature and adoption according to each HYjlqk\ge]kla[hjg[]\mj]k&L`]ljY\]Y_j]]e]fl`YkZ]]fhmZdak`]\afl`]=MG^[aYdBgmjfYdgf*)L9=M;]fljYd9e]ja[Y AfBmf]*()*$l`]=MYf\;]fljYd9e]ja[Y ;gklYJa[Y$=dKYdnY\gj$?mYl]eYdY$@gf\mjYk$Fa[YjY_mYand Panama) signed a comprehensive Association Agreement, which also includes an ambitious trade component. Once fully implemented, it will open up markets on both sides, as well as increase the stability and predictability of the trading environment

`!>L9=M%;YfY\Y L`]=Mak[mjj]fldqf]_glaYlaf_l`];gehj]`]fkan]=[gfgea[Yf\LjY\]9_j]]e]fl ;=L9!oal`;YfY\Y&L`]afalaYd_gYdg^fYdaraf_l`]f]_glaYlagfkZql`]]f\g^*()*`YkfglZ]]fj]Y[`]\$eYafdqdue to objections raised by the beef industry.

i) Other FTA negotiations L`]=Makaff]_glaYlagfoal`nYjagmkgl`]j[gmflja]klg[gf[dm\]Yf>L9&Kge]>L9f]_glaYlagfkYj]af

hjg_j]kk3gl`]jkYj]\]dYq]\gjkmkh]f\]\&L`]egklaehgjlYflgf_gaf_f]_glaYlagfkYj]oalÈYdYqkaYYf\E]j[gkmj&

Reform of the EU Generalised Scheme of Preferences

L`]?]f]jYdak]\K[`]e]g^Hj]^]j]f[]k ?KH!YaekYl`]dhaf_\]n]dghaf_[gmflja]kZqeYcaf_al]Yka]j^gjl`]elg]phgjll`]ajhjg\m[lklgl`]=M&L`][mjj]fl?KH[gn]jkl`j]]k]hYjYl]j]_ae]k2 L`]klYf\Yj\?KH L`]kh][aYdaf[]flan]YjjYf_]e]flcfgofYk?KH# L`]=n]jqlàf_Zml9jek =:9!YjjYf_]e]fl d]Ykl\]n]dgh]\[gmflja]k!Gf+)G[lgZ]j*()*$Yf]o?KHJ]_mdYlagf =M!Fg&1/0'*()*`YkZ]]fhmZdak`]\Yf\oaddZ]Yhhda[YZd]as of 1 January 2014, providing ample time to economic operators to adapt smoothly.

Reforms include a better focus on countries in need, such as more advanced developing countries, which are now globally active and many poorer countries, affected by these more advanced developing countries and


suffered from the global economic crisis. Secondly, the graduation principles have been revised in order to ensure a better targeting and uniform treatment of products. Finally, incentives will be launched for countries lgbgafl`]?KH#k[`]e]$km[`Ykd]kk[geh]lalagf^jgeegj]Y\nYf[]\\]n]dghaf_[gmflja]k$fg_jY\mYlagfafl`]?KH#k[`]e]$Yhhda[Ylagfklgbgafl`]?KH#k[`]e]oaddZ]Y[[]hl]\YlYddlae] jYl`]jl`Yfgf[]every 1.5 years now) and the vulnerability criterions will be broadened.

L`]f]o?KHk[`]e]oaddaf[dm\]01Z]f][aYja]k$,1d]Ykl\]n]dgh]\[gmflja]k =:9!$km[`YkLYfrYfaY$@YlaYf\;YeZg\aYYf\,(?KH'?KH#[gmflja]k$km[`Yk9je]faY$:gdanaYYf\AjYi&Gfl`]gl`]jka\]$l`]j]Yj]Yka_fa[YflfmeZ]jg^[gmflja]kl`Yloaddfgdgf_]jZ]f]l^jgel`]?KHkqkl]eYkg^)BYfmYjq*(),&L`]jkl[Yl]_gjqaf[dm\]k++gn]jk]Yk[gmflja]kYf\l]jjalgja]k$eYafdq=Ml]jjalgja]kthat have their own market (e.g., Netherland Antilles, French Polynesia). Secondly, 34 countries which enjoy gl`]jljY\]Y_j]]e]flkoal`l`]=Ml`Ylhjgna\]Yf]imanYd]fl[gn]jY_]$oaddZ]]p[dm\]\^jgel`]?KHk[`]e] ]&_&$E]pa[g$Kgml`9^ja[Y$=mjge]\[gmflja]k!&>afYddq$Y_jgmhg^*([gmflja]kl`Yl`Yn]Z]]flisted by the World Bank as high- or upper-middle income economies for the past three years will be no longer af[dm\]\afl`]?KHk[`]e] ]&_&$KYm\a9jYZaY$Mfal]\9jYZ=eajYl]k$:jYrad$9j_]flafY$?YZgf$JmkkaY$CYrYc`klYf$EYdYqkaY!&

2. Human capital2.1 Formalities for hiring personnel

The law of 3 June 2007 (replacing the law of 5 June 1928) regarding labor contracts for seafarers stipulates that an employment contract must be in writing, has to be drawn up in three copies and must [gflYafkh][a[[dYmk]k&KmZb][llg[]jlYaf[gf\alagfk$Yf]ehdgqe]fl[gfljY[l[YfZ]ka_f]\Zqe]Yfkg^Yfelectronic signature. The seafarers must be registered in a book kept by the Belgian maritime authorities.Duration of the contract

According to the employment law for seafarers, the employment contract must include the duration of the contract or the voyage(s) for which it was signed. It has to be entered into for a certain period of time, but it can be renewed without limitation. If the vessel is still at sea when the contract expires, the agreement is still valid until reaching the next port where there is a possibility of disembarking. The law of 3 June 2007 stipulates different possibilities for terminating an employment contract.Wages

L`]oY_]k[Yd]k^gjk]Y^Yj]jkj]_akl]j]\afl`]E]j[`YflFYnqHggdYf\^gjfgf%Hggdk]Y^Yj]jkYj]p]\afcollective bargaining agreements. Also, the stipulations in the law of 3 June 2007 concerning loss of wage, payment of the wage, power of attorney and advanced payment have to be taken into account.

2.2 National labor law:]d_aYfdYZgjdYoYhhda]ka^Yn]kk]dkYadkmf\]jl`]:]d_aYfY_&

2.3 Regulations on employing personnelCrew 9ddk]Y^Yj]jk]ehdgq]\gfY:]d_aYf%Y__]\n]kk]d`Yn]lgZ]j]_akl]j]\oal`l`]:]d_aYfeYjalae]

Yml`gjala]k G

38

Belgium

JgqYd


=MJ]_mdYlagfk),(0'/)Yf\00+'*((,&Afl`]k]j]_mdYlagfk$l`]k]Y^Yj]jak_]f]jYddqj]imaj]\lgogjcgfZgYj\Yn]kk]dl`Yla]kl`]Y_g^Yf=ME]eZ]jKlYl]& Hd]Yk]fgl]l`Yl=MJ]_mdYlagf0++'*((,$l`]f]on]jkagfg^=MJ]_mdYlagf),(0'/)$`Yk]fl]j]\aflg^gj[]&!L`]j]_mdYlagfakYhhda[YZd]lgl`])(f]oE]eZ]jKlYl]k^jge)EYq*((, af[Yk]ZadYl]jYdlj]Yla]k]pakl]\oal`km[`[gmflja]k$l`]qoaddZ]j]hdY[]\Zql`][gjj]khgf\af_hjgnakagfkg^=MJ]_mdYlagf00+'*((,!&

9fmeZ]jg^ZadYl]jYdlj]Yla]k$^gjafklYf[]2 %L`]lj]Ylqoal`Dmp]eZgmj_g^*-EYj[`)11) - The treaty with the Tunisian Republic of 29 January 1975 - The treaty with Israel of 5 July 1971 %L`]Y\eafakljYlan]Y_j]]e]flg^*0EYj[`)1/0Yff]p]\lgl`]lj]Ylqoal`Lmjc]qg^,Bmdq)1.. %L`]lj]Ylqoal`l`]Mfal]\KlYl]kg^9e]ja[Yg^)1>]ZjmYjq)10*

*&/ EYffaf_akkm]koal`qaf_l`]:]d_aYfY_K]n]jYde]Ykmj]k`Yn]Z]]flYc]flg\][j]Yk]l`][j]o[gklg^:]d_aYf%Y__]\n]kk]dk&L`]]^^][lan]difference between gross and net wages is about 13%.Social security

=M[alar]fkj]_akl]j]\afl`]:]d_aYfE]j[`YflFYnqHggdZ]f]l^jgel`]^gddgoaf_j]\m[lagfkg^kg[aYdcontributions: LglYd]p]ehlagf^jge]ehdgq]jkkg[aYdk][mjalq[gfljaZmlagfk HYjlaYd]p]ehlagf^jge]ehdgq]]kkg[aYdk][mjalq[gfljaZmlagfk J]\m[]\[gfljaZmlagfklgl`]9[[a\]flkYlOgjc>mf\Withholding tax deducted from salaries

For certain seafarers employed on board vessels that are registered in the EEA, shipowners are exempt from the payment of withholding tax on professional income levied on seafarer wages, provided certain conditions are met (in accordance with the law of 20 July 2005).Tax measures for shipping companies

For more details, please refer to section 1.

3. Corporate structure3.1 Most commonly used legal structures for shipping activities

Egkl[gehYfa]kgh]jYl]Ykdaeal]\daYZadalq[gehYfa]k$gjFYYedgr]N]ffgglk[`Yh FN!&L`]daYZadalqg^l`]shareholders of an NV is limited to their interest in its share capital. The tax rate depends on the amount of lYpYZd]hjgl$Zmlafegkl[Yk]kYegmflklgl`]klYf\Yj\jYl]++&11&>gj]a_f[gehYfa]k[YfYdkgghllgoperate via a legal branch in Belgium, rather than establishing a company.

+&* LYpYlagfg^hjgl\akljaZmlagfMf\]jl`]hYjla[ahYlagf]p]ehlagf$mhlg1-g^\ana\]f\kj][]an]\ZqY:]d_aYf[gehYfqgjZjYf[`Yj]lYpexempt. The dividends received exemption applies only if the distributing company is subject to a standard corporate income tax regime in its country of residence (taxation condition) and if the recipient of the dividend holds a participating interest of at least 10% for a minimum of one year, or with a purchase value of Yld]Ykl*&-eaddagf hYjla[ahYlagf[gf\alagf!&


EYj[gHgdgAA *((/%)+!L`]EYj[gHgdghjg_jYefYf[aYddqkmhhgjlkafalaYlan]klYc]fZq[gee]j[aYdmf\]jlYcaf_k o`]l`]jhjanYl]dq

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Belgium

or publicly owned) aiming at shifting freight transport off the road in order to reduce congestion and to improve the environmental sustainability of the European transport system.

Companies with viable projects to shift freight from roads to greener modes (such as railways, sea-routes or afdYf\oYl]joYqk![YfYkkm[ `lmjflgEYj[gHgdg^ gjfYf[aYdkmhhgjl&>an]eYaflqh]kg ^hjgb][lkYj]]da_aZd]2 Eg\Ydkà^l^jgejgY\lgjYadYf\oYl]jZgjf]kqkl]ek ;YlYdqklY[lagfkl`Ylhjgegl]eg\Ydkà^l EglgjoYqkg^l`]k]YZ]lo]]feYbgjhgjlk LjY^[Ynga\Yf[] ;geegfd]Yjfaf_Y[lagfkAfl]j%eg\Ydhjgb][lk[geZafaf_l`]\a^^]j]flljYfkhgjleg\]kjgY\$jYadYf\oYl]jZgjf]Yj]]da_aZd]Yko]dd&LgimYda^q^gj^mf\af_$hjgb][lkemklafngdn]afl]jfYlagfYdljY^[&HYkk]f_]jljYfkhgjlhjgb][lk\gfglqualify. For mixed projects like ferry services, only the freight segment is eligible. Pure infrastructure projects, research or study projects and air transport also fall outside its scope.

Funding is always in the form of an outright grant. Applicants must meet a series of conditions to obtain a grant. When approved, grants cover a share of the eligible costs, with a standardized maximum funding level of 35%. Eligible costs are those necessary to implement the project. They do not include return on capital, VAT, debt and debt service charges.

L`][mjj]flhjg_jYe EYj[gHgdgAA!jmfkmflad*()+oal`YfYffmYd_jYflZm\_]lg^YZgml.(eaddagf&L`]=;YffmYddqhmZdak`]kY[Ydd$oà[àkYj]im]kl^gjdaf_hjghgkYdkg^hjgb][lkoalàfYhj]k]lh]jag\g^lae]&L`]*()+[Yddegkldac]dqoaddZ]dYmf[`]\afEYj[`gj9hjad&Hjgb][lkjmfegkldq^jgeloglgn]q]Yjk&Flemish strategic investment support

L`]>d]eak`?gn]jfe]flg^^]jk_jYflk^gjkljYl]_a[afn]kle]flhjgb][lkaflYf_aZd]p]\Ykk]lkafl`]Flemish region.

This grant is open to small- and medium-sized companies with an establishment (the place where the afn]kle]flklYc]hdY[]!afl`]>d]eak`j]_agf&DYj_][gehYfa]kgfdqimYda^q^gjafn]kle]flkafl`]>d]eak`regional development zones.

Principal conditions: L`][gehYfq`Yklge]]l[]jlYaf][gfgea[Yd$kg[aYdYf\][gdg_a[Yd[jal]jaY& L`][gehYfq`Yklg\]egfkljYl]l`]kljYl]_a[Yf\Y\\]\nYdm]g^l`]hjgb][lYf\l`]f]]\^gjY_jYfl& L`][gehYfq`Yklghj]k]flYimYdalYlan]Zmkaf]kkhdYf& L`]hjgb][l`Yklg_]f]jYl]Yld]Ykl0eaddagfg^]da_aZd][gklkoalàfl`j]]q]Yjk&The maximum grant ranges between 5% and 10% of the eligible costs. This grant is open continuously, but a company can only apply once in a three-year period and needs to apply before the investments start.

Beginning in 2013, the Flemish strategic investment support will change into a new support mechanism called Strategic Transformation Support. This new mechanism will focus on investments in strategic clusters Yf\d]Y\hdYflkaf>dYf\]jk$kmhhgjlaf_afl]jfYlagfYd_jgol`Yf\\]n]dghe]flgâffgnYlan]KeYddYf\E]\ameKar]\=fl]jhjak]k KE=k!Yf\afn]kle]flkl`Yld]Y\lgljYfk^gjeYlagfYf\j]Ydar]YkmklYafYZd]Yf[`gjaf_gîmportant employment in Flanders.Flemish strategic training support

L`]>d]eak`?gn]jfe]flg^^]jk_jYflk^gjkljYl]_a[ljYafaf_hjgb][lkafl`]>dYf\]jkj]_agf&Làk_jYflakgh]fto all companies (also companies engaged in the shipping industry) with an exploitation seat in the Flanders region that carry out major training projects.The maximum grant ranges between 20% and 25% of the eligible costs.

It is possible to submit an application combining both strategic training and investment support as long as both projects are undertaken in the Flanders region.


Beginning in 2013, the Flemish strategic training support will change into a new support mechanism called Strategic Transformation Support. This new mechanism will focus on investments in strategic clusters and d]Y\hdYflkaf>dYf\]jk$kmhhgjlaf_afl]jfYlagfYd_jgol`Yf\\]n]dghe]flgâffgnYlan]KE=kYf\afn]kle]flkthat lead to transformation and realize a sustainable anchoring of important employment in Flanders.Flemish grants for ecological investments

L`]>d]eak`?gn]jfe]flg^^]jk_jYflklg]fl]jhjak]kl`YleYc][]jlYaf][gdg_a[Ydafn]kle]flkaf>dYf\]jk&All enterprises that are established in Flanders and whose main activity belongs to one of the admitted k][lgjkgfl`]ZYkakg^l`]=mjgh]Yf;dYkka[Ylagfg^=[gfgea[9[lanala]k F9;=![g\][YfYhhdq^gjl`]^gddgoaf_log_jYflk2l`]=[gdg_a]Hj]ea]Hdmk =H#!Yf\l`]KljYl]_a[=[gdg_qKmhhgjl KLJ=K!&L`]=H#af[]flan]akgfdq_jYfl]\lgl][`fgdg_a]kl`YlYj]gfYdaealYlan]l][`fgdg_qdakl DLD!&Làkdaklcontains about 150 technologies (note: ecological investments that are eligible for aid through green []jla[Yl]kYf\[g_]f]jYlagf[]jla[Yl]kYj]fgl]da_aZd]^gjYf][gdg_a[Ydaf[]flan]!&L`]`]a_`lg^=H#ak\]l]jeaf]\Zql`]h]j^gjeYf[]g^l`]l][`fgdg_qafoà[`l`]afn]kle]flakeY\]Yf\nYja]kY[[gj\af_lgl`]kar]g^l`]]fl]jhjak] Y\aklaf[lagfakeY\]Z]lo]]fKE=kYf\dYj_]]fl]jhjak]k!&Furthermore, the subsidy percentage depends on the nature of the investment; for an ecological investment aljYf_]k^jge-lg+-$^gjYfafn]kle]flafj]f]oYZd]]f]j_qkgmj[]kgjà_`%]^[a]fl[g_]f]jYlagfl`]grant ranges from 5% to 45% and an energy-saving investment can go from 5% to 60%. An additional bonus between 3% and 10% can be added if an enterprise can prove it has performed an energy audit, or it has a nYda\]fnajgfe]flYd[]jla[Yl]gjYf]fnajgfe]flYdeYfY_]e]flkqkl]e&As of January 2013, also ecological investments in technologies that cannot be standardized because of

EY 2013 Shipping Industry Almanac

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Transcript of EY 2013 Shipping Industry Almanac