Section 115VZB Targets Abuse of Tonnage Tax Scheme to Prevent Unfair Tax Advantages in Maritime Sector
Section 115VZB addresses the avoidance of tax through the abuse of the tonnage tax scheme. The scheme is inapplicable if a tonnage tax company engages in transactions or arrangements that result in a tax advantage for non-tonnage tax entities or for the company in non-tonnage tax activities. An abuse is identified when such transactions lead to reduced income or increased loss from non-tonnage tax activities, or if they yield more than ordinary profits from tonnage tax activities. Tax advantages include adjustments in expense allowances or cost allocations that affect taxable income.