The European Commission has announced that it is to open an in-depth state aid investigation into fiscal exemptions granted by France to certain maritime chartering services. The Commission will in particular investigate the inclusion of time chartered vessels sailing under non-EU flags in the scope of a favorable fiscal regime based on the taxation of the fleet tonnage.

The term “time chartering” refers to transport services which are provided with vessels and crew temporarily rented from other companies. In May 2003, the Commission approved the French tonnage tax scheme. For shipping companies that opt for this alternative method of taxation, the tax base is calculated from the tonnage of the fleet rather than the actual profits of the company. The scheme limited the eligibility of time chartered ships not flagged in the EU. According to the Commission, France subsequently removed the specific flagging rules for time chartered vessels.

For details of the investigation are available on the European Commission’s website.