Cyprus Green Incentives Programme Tonnage Tax Regime
The Shipping Deputy Ministry (SDM) of the Republic of Cyprus announced on the 19.01.2021 a new range of green incentives with the aim of rewarding vessels demonstrating effective emissions reductions. By introducing a host of incentives, they encourage and simultaneously, reward shipowners who opt for lower emissions or use alternative drives. From fiscal year 2021, annual tonnage tax will be reduced by up to 30% for each vessel that successfully demonstrates proactive measures to reduce its environmental impact, ensuring shipowners are rewarded for sustainable shipping efforts.
The incentives are based on 3 pillars:
- EEDI: vessels that have achieved further reduction of their attained EEDI compared to the required EEDI (Regulation 20 / MARPOL ANNEX VI) will obtain the respective annual tonnage tax rebate of between 5 - 25%.
- IMO DCS: the environmental incentive relating to the IMO Data Collection System (DCS) applies to ships of 5,000 GT and above that comply with Regulation 22A of MARPOL ANNEX VI. Ships which demonstrate reduction of the total fuel oil consumption in relation to the distance travelled, compared to the immediately previous reporting period will obtain an annual tonnage tax rebate of between 10 – 20%.
- Alternative fuels: vessels using an alternative fuel and achieving CO2 emissions reductions of at least 20% in comparison with traditional fuels will receive a rebate on annual tonnage tax of between 15 - 30%. This will be reviewed on a case by case basis, following review of documents submitted from a class society.
How can we help you?
With our comprehensive support at every stage, we will assist you by:
- Providing legal advice and clarifications on the new incentives;
- Advise on any regulatory procedures and processes regarding eligibility to qualify for the respective incentives/ rewards and provide guidance and clarifications on the application forms and any other supporting documentation required;
- Provide any advice required regarding the laws and/ or regulations governing these incentives, on a national as well as EU level, where required.
Author: Evyenia Epaminondou