Tonnage tax reserve compliance governs shipping companies' scheme eligibility, reserve use, training obligations, and chartered-in tonnage limits. A tonnage tax company must credit at least 20% of qualifying shipping book profit to a Tonnage Tax Reserve Account and use it within eight years for acquiring a new ship or inland vessel, or for operating qualifying ships until such acquisition. Shortfalls may be carried forward in limited cases, but continuous failure to create the reserve for two consecutive tax years, misuse of the reserve, or breach of the statutory lock-in can affect the scheme's tax treatment and may cause the option to cease. The section also requires minimum training compliance, separate books, an accountant's report, and limits chartered-in tonnage to 49% of net tonnage.
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Provisions expressly mentioned in the judgment/order text.
Tonnage tax reserve compliance governs shipping companies' scheme eligibility, reserve use, training obligations, and chartered-in tonnage limits.
A tonnage tax company must credit at least 20% of qualifying shipping book profit to a Tonnage Tax Reserve Account and use it within eight years for acquiring a new ship or inland vessel, or for operating qualifying ships until such acquisition. Shortfalls may be carried forward in limited cases, but continuous failure to create the reserve for two consecutive tax years, misuse of the reserve, or breach of the statutory lock-in can affect the scheme's tax treatment and may cause the option to cease. The section also requires minimum training compliance, separate books, an accountant's report, and limits chartered-in tonnage to 49% of net tonnage.
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