Tag Archives: Shipping

Nicaragua Approve Canal Plans

Nicaragua’s National Assembly has approved a bid from a Hong Kong magnate for the construction of a canal to rival Panama’s long-established waterway, costing around USD40bn.

Map of Nicaragua

Map courtesy of Biblioteca Verde

Nicaragua, one of the region’s least developed nations, had received expressions of interest from investors in several nations, including Japan, South Korea, Russia, Venezuela and Brazil.

Under the agreement, Hong Kong-based Nicaragua Canal Development Co Ltd will be granted a 50-year concession to build the canal, and a further 50 years to manage it. The project, which would involve the creation of a canal approximately 10 kilometers in length, is now anticipated to cost USD40bn, up from early estimates of USD30bn — almost four times the nation’s gross domestic product.

The Nicaraguan government had previously anticipated that the project could be completed by as early as 2019, and could handle 573 million metric tons by 2025 – substantially more than the record of 322.1 million tons of cargo handled by the Panama Canal in 2011.

Even though a significant expansion of the Panama Canal is presently underway, Nicaragua’s canal would be able to cater for ships too large to pass through the Panama Canal, of up to 400 meters in length and 60 meters in width.


Simplified Tax Regime for Jamaican Registered Yachts

Picture of James Bond beach on Jamaica courtesy of Banjoman1

Jamaica’s Cabinet has approved proposals to introduce an annual fee to replace the multitude of levies in place on Jamaican-registered yachts in a bid to improve the attractiveness of the local registry.

It was on Jamaica that Fleming wrote more than a dozen novels and short stories featuring Agent 007. Of these once best-selling volumes of action pulp, “Dr. No,” “Live and Let Die,” “The Man With the Golden Gun” and the short story “Octopussy” are largely or partly set in Jamaica, and the films based on the first two were also shot there.

The annual fee will replace the existing customs duty, customs user fee, environmental levy, and General Consumption tax charges on flags registered in Jamaica, providing for a simpler, streamlined regime for boat owners. In addition, yachts of less than 25 feet will be exempt from registration and safety inspection fees for the first two years of their registration.

Jamaican information minister, Sandrea Falconer said that the government hoped to “stimulate nautical tourism and yacht registration in Jamaica,” and “enhance the competitiveness of the Jamaican Shipping Registry by encouraging the registration of pleasure craft and facilitating home porting in Jamaica.” She identified that presently around 8% of yachts berthed in Jamaica are locally registered.

The plans include the introduction of a cruising permit fee, under the Shipping Act, to be paid by visiting yachts bearing other territories’ ensigns.


Palau Launches International Shipping Registry

Picture of Leisure World by Ivan Meshkov

The Palau International Shipping Registry has officially opened its doors following a launch ceremony which saw the registration of its first two vessels, the cruise ships Amusement World (12,764 Gross Registered Tonnage (GRT)) and Leisure World (15,653 GRT) operated by Universal Ship Management.

Despite the territory’s diminutive size, with a population of just 22,000, the Registry has already signed up to the most significant major shipping conventions, including: the International Convention for Safety of Life at Sea; the International Convention for the Prevention of Pollution from Ships; the Safety of Training, Certification and Watchkeeping; the Bunker Convention; the Civil Liability Convention; and the Maritime Labour Convention 2006, among others.

The Republic of Palau consists of eight principal islands and more than 250 smaller ones lying in the western Pacific, with maritime boundaries with Indonesia, Philippines and the Federate State of Micronesia. The Registry is headquartered and administered in Houston, USA.

The Registry is committed to the highest international standards. The President of Palau, Johnson Toribiong said at the launch: “In announcing the opening of the Palau International Ship Registry for business, we are committed to ensuring the safety of our fleet personnel and passengers, ensuring protection of environment by which our fleet traverse, and ensuring peaceful voyages of our fleet, reflective of the Republic of Palau and her flag. We are proud to say that the Palau International Ship Registry is not just another ship registry, but, a ship registry of the highest standard.”


Gibraltar will cut taxes for shipping and domicile income

The Gibraltar government has announced a number of tax cuts in the 2012/13 Budget, slashing import duties and cutting personal income tax payable for a number of categories of taxpayers.

In order to be more attractive to foreigners and rise future income, the Gibraltar government has announced a taxpayer-friendly budget, with consolidation efforts instead focusing on restraining government spending.

The most comprehensive changes will come in the area of import duties, which have been reduced or removed entirely for a number of retail goods. Most electrical goods and computer software will be newly exempt from import duties, while duties on perfumes, cosmetics, clothes, jewellery, and mobile phones will be halved.

Import duties on hybrid cars and biofuel are to be removed, and a cash-back scheme will be introduced for persons purchasing environmentally friendly vehicles. In addition, import duties are to be removed on the import of vehicles adapted for use by disabled persons.

In a move aimed at encouraging the registration of super yachts in Gibraltar, seagoing vessels over 18 metres in length will no longer be subject to import duties, while import duties on vessels under 18 meters in length will be subject to a reduced 6% rate. Under the previous regime, vessels of over 80 tons were exempt, while those under 80 tons were subject to a 12% rate.

The only increase to import duties will impact cigarettes. The system of import taxation in this area will be reformed, from a rate applied per kilo, to a rate per packet of 20 cigarettes, with the rate hike adding GBP 0.10 to a packet of cigarettes.

Substantial changes have also been announced in respect of the territory’s two income tax regimes, the Gross Income Based regime and the Allowance Based System.

The government has confirmed its commitment to reducing the maximum rate imposed on personal income tax under the Allowance Based System, to 15% by 2015 / 2016. To begin to reduce effective rates, the rate applicable to the first GBP 4,000 (USD 6,200) of taxable income will be reduced from 17% to 15%. This will exempt taxpayers with earnings of GBP 9,000 or less. Relief will be increased further in 2013, to exempt those with earnings of GBP 10,000 or less.

Taxpayers in receipt of income between GBP 9,000 and GBP 19,500 will receive enhanced tax relief to smooth tax liability disparity between tax-paying and tax-exempt earners. New changes also aim to exempt all disabled working persons from taxation.

Meanwhile, taxpayers under the Gross Income Based system will now benefit from being able to deduct up to GBP 1,000 from their assessable income in respect of mortgage interest payments.

In addition, persons taxed under the Gross Income Based tax regime will be entitled to up to GBP 5,000 in tax relief for approved expenditure incurred on painting, decorating, repair or enhancement, of the frontage of Gibraltar premises, if they are approved by the Town Planner.

Lastly, the cap of GBP 35,000 will be removed in respect of tax relief for private pension contributions.


International transport – No taxes if China based

International transport services (Shipping, Airlines  etc.) incorporated within China have been granted an exemption from business tax under a notice issued by the Chinese government.

The Notice, issued jointly by the Ministry of Finance and the State Administration of Taxation, applies to revenues generated from international and regional routes, and applies retroactively from January 1, 2010.

In a statement made to the Hong Kon
g Stock Exchange, Air China said that, based on actual air traffic revenue earned from international and regional routes, the airline will obtain an estimated benefit of approximately CNY549m (USD80m) for 2009.

Air China stated that it anticipates a consolidated tax rate of 3.21% in 2009, including the business tax, urban maintenance and construction tax and education surcharge.

The exemption applies to any firm or individual that provides international delivery services, including shipping companies, according to the ministry of finance website, and any tax already paid would be refunded.

Cosco Shipping Co., a unit of China Ocean Shipping (Group) Co., also announced an expected CNY42m saving for 2009 from the tax exemption.