The Commission has opened an investigation into changes planned by Ireland to its tonnage tax regime, i.e. the flat-rate tax regime based on the tonnage of ships. FA06 s67, which is subject to a Commencement Order, brought in the changes. The investigation occurs under the Community guidelines on State Aid to maritime transport of 2004.

According to the Commission press release, last year the Irish authorities notified their intention to modify the ‘time charter’ rules laid down in that regime retroactively from 1 January 2006. In 2002, the Commission approved the Irish tonnage tax scheme until the year 2012.

A “time-chartered” ship is chartered with crew for a period of time. Currently, the Irish tonnage tax regime allows for a ratio of 1 owned to 3 time-chartered ships (1:3). The modification to the Irish tonnage tax regime proposes to allow for a 100% time-chartered fleet to benefit from the scheme.

Although the 2004 guidelines do not impose such restrictions, the Commission has so far only allowed tonnage tax schemes with a time charter ratio of (1:3) or (1:4).

Further information is available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/45&format=HTML&aged=0&language=en&guiLanguage=en.