Tonnage tax can be used instead of Corporation Tax for working out the tax you owe on your profits.
You can choose to pay tonnage tax on a fixed notional profit, instead of your actual profits from your shipping activities. This is based on the net tonnage of your ships.
Qualifying conditions
You may be able to choose to pay tonnage tax if:
- you are a qualifying company
- you have qualifying ships
- you meet certain obligations to train seafarers
Elect to use tonnage tax
You can elect to use tonnage tax but you must sign up for a minimum of 10 years.
You can make a renewal election on a rolling basis to extend the original election.
Ships registered outside the European Union (EU) or European Economic Area (EEA) member states
If you start to operate a qualifying ship after electing into tonnage tax, you must carry out a flagging test to decide if your ship qualifies. You don't need to carry out the flagging test if the financial year is excepted.
More information about UK Tonnage Tax
