P&O turns to Cyprus reg­is­ter as Brexit gets messy

Financial Mirror (Cyprus) - - CYPRUS -

Ferry and ship­ping freight op­er­a­tor P&O is re­view­ing its UK-regis­tered fleet and is al­ready re-flag­ging two ves­sels to keep Euro­pean Union tax ar­range­ments ahead of Bri­tain’s de­par­ture from the bloc, the com­pany said.

A P&O spokesman said two of its UK ships op­er­at­ing on the English Chan­nel route to France would be re­flagged to Cyprus which boasts the EU’s third largest ship­ping reg­is­ter and the 11th big­gest mer­chant fleet world­wide.

“The change is be­ing made to pre­serve the ton­nage tax fi­nanc­ing ar­range­ments, un­der which the ships should re­main flagged in an EU mem­ber state,” a state­ment said.

The spokesman added that P&O was re­view­ing the flag sta­tus of its four other ships op­er­at­ing on the Chan­nel route, although no fi­nal de­ci­sion had been taken.

Such a tax­a­tion sys­tem al­lows ship­ping com­pa­nies to pay cor­po­ra­tion tax based on the ton­nage of their ves­sels rather than on profit.

The move will come

Reuters re­ported.

As of Novem­ber 2018, there were 1,306 ves­sels of over 500 GT (gross ton­nage) per ship regis­tered with the Bri­tish flag, down from 1,317 in 2017, 1,328 in 2016, 1,330 in 2015 and 1,327 in 2014, of­fi­cial data showed.

With just over 100 days un­til Bri­tain is due to leave the EU, Bri­tish Prime Min­is­ter Theresa May is yet to win the sup­port of a deeply di­vided par­lia­ment for the deal she struck last month with Brus­sels to main­tain close ties with the bloc.

At the same time, the Bri­tish govern­ment is step­ping up prepa­ra­tions for a “no-deal” Brexit.

Since the cre­ation of a Cyprus ship­ping Min­istry last year, com­pa­nies regis­tered un­der the ton­nage tax sys­tem in­creased 13.69% from 168 to 191.

The Cen­tral Bank of Cyprus’ ship man­age­ment sur­vey (Jan­uary-June) shows that the sec­tor has recorded its largest in­crease since 2013, which is cre­at­ing more jobs.

Data shows that ship­man­age­ment’s con­tri­bu­tion to the econ­omy, in the first six months, amounted to EUR 506 mln or 5.1% of GDP which is the high­est since 2013.

A to­tal of 1,100 ocean-go­ing ships op­er­ate un­der the Cypriot flag and around 700 smaller ves­sels with to­tal ton­nage of 24 mil­lion.

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