Tonnage Tax

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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:

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