Tonnage tax reserve requirement ties tax benefits to reinvestment and training; non compliance ends tonnage tax option.
Section 232 requires tonnage tax companies to credit a mandated proportion of book profit from qualifying shipping activities to a Tonnage Tax Reserve Account annually, permitting use of the reserve within a fixed period for acquisition of qualifying new ships or for operating qualifying ships while prohibiting distributions or offshore asset creation; misuse or non utilisation causes apportionment and taxation of the relevant shipping income, and repeated failures in reserve creation or in meeting training and charter in limits lead to cessation of the tonnage tax option. Reporting, separate books and prescribed certificates are required, and several operational details are left to delegated rules.