Cayman Islands Announces New Tonnage Tax Regime

November 22, 2011, 14:00 / Advisory / Jurisdiction: Cayman Islands, Source: Global Tax News

The Maritime Authority of the Cayman Islands (MACI) is introducing a new Annual Tonnage Fee (ATF) structure, which will come into effect on January 1, 2012.

In a bid to remain competitive with other territories, MACI has carried out a detailed investigation of its current ATF system with a particular focus on comparison with the other key jurisdictions.

MACI said the net result of this exercise will be a simplified and very competitive structure which for the first time in MACI’s history provides two different formulations, one for merchant vessels and one for pleasure yachts, including those engaged in trade.

MACI’s Director for Global Operations, Kenrick Ebanks said: “We have long recognized that the economic operating profile for merchant ships is very different to yachts and it is therefore, entirely logical to develop two separate regimes which take account of this fact.”

The new ATF structure for merchant ships will now include a flat minimum ATF of USD1,000, and this rate will be chargeable up to 2,500 gross tonnes. For vessels in excess of this figure, the first 2,500 tonnes will be charged at the flat minimum of USD1,000 with the remainder charged at USD0.11 per unit gross tonne.

For pleasure yachts, including yachts registered as commercial vessels, the flat minimum will be USD400 and this will be chargeable up to 500 gross tonnes. Larger yachts will be charged at USD600 for the first 1,000 tonnes with the remainder charged at USD0.20 per unit gross tonne.

MACI has said it is confident that the new structure will benefit its clients, and will ensure that the Cayman Islands remain an attractive place for ship registration.

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