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Greek Shipowners Will Pay Taxes

shipping1Greek shipowners, whose industry had remained untaxed despite the country’s crushing economic crisis, have reportedly agreed to stay paying on their vessels registered abroad and flying foreign flag, although their other fiscal advantages will remain unchanged, a source from the Merchant Marine Ministry told Agence-France-Presse.
An agreement between the government and the shipowners that will be part of the new tax bill the Greek Parliament was expected to approve later will alter a fiscal system virtually unchanged since 1955 said the source.
According to the new provision, the tonnage tax currently in force for the Greek merchant fleet will now apply to “foreign shipowners or companies for ships sailing under foreign flags that are managed by companies based in Greece.” The same source said that a large part of the Greek fleet sailing under foreign flags falls under this category.
Authorities are hoping that the new provision will not result in companies fleeing the country, as the tax imposed on the new contributors will be relatively small. Greek shipowners have steadfastly refused to pay taxes and warned they would relocate to other countries if forced to do so. Greek shipping is the world’s largest, controlling some 18 percent of all vessels.
The ministry was not able to give an estimate of how much the tax would bring in or other details about the industry, which has remained largely hidden from government scrutiny. Sources, however, told AFP that the new tax could bring in about 100 million euros, or about $133.4 million annually, a miniscule amount compared to the $70 billion owed by tax chaets.
Greek shipowners are leaders in their sector internationally, but only nearly a third of their fleet sails under the Greek flag as they use flags of convenience of other countries to avoid paying taxes in their homeland.
With Greece heading into a sixth year of a deep recession, resentment has grown against the Greek captains of industry who have tried to do all they could to avoid paying taxes while Greek workers, pensioners and the poor have been hit with waves of pay cuts, tax hikes and slashed benefits. Greek shipowners are also exempt from paying tax on profits generated by their Greek-flagged vessels, paying only the tonnage tax.

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