zoomImage Courtesy: EC

Various Belgian support measures for maritime transport have been prolonged until the end of 2022 following an approval granted by the European Commission under EU State aid rules.

The scheme encourages shipping companies to register their ships in Europe and so ensure higher social, environmental and safety standards.

Belgium has also committed to a number of changes to its scheme to prevent any discrimination between shipping companies and registries of different European Economic Area (EEA) States and to avoid undue competition distortions.

Under the Belgian scheme, a shipping company is taxed on the basis of ship tonnage rather than the actual profits of the company. In particular, tonnage taxation will be applied to a shipping company’s core revenues from shipping activities, such as cargo and passenger transport; certain ancillary revenues that are closely connected to shipping activities; and revenues from towage and dredging as well as onshore ship management activities, subject to certain conditions.

The Belgian scheme requires that if a shipping company wants to benefit from the scheme, a significant part of its fleet flies the flag of an EU or EEA State.

In this respect, the Belgian authorities have committed to extend the benefit of tonnage tax to all eligible ships that fly an EEA flag. This will prevent any discrimination between shipping companies and registries of different EEA States and preserve internal market rules on freedom of establishment.

After assessing the amended measures under EU State aid rules, the Commission concluded that the Belgian scheme is in line with the rules, because it will provide incentives to maintain maritime jobs within the EU, whilst preserving competition within the EU Single Market. More specifically, it will encourage shipping companies to register their ships in Europe and thus commit to high social, environmental and safety standards.