Month: December 2017

27 Dec 2017

From 1st January 2018 large ships must monitor and report CO2 emissions

As of 1st January 2018, according to EU Regulation on monitoring, reporting and verification of carbon dioxide emissions from maritime transport (Regulation No. 757/2015 as amended) ships over 5000 gross tonnage (“relevant ships”), regardless of their flag and subject to a few exclusions (warships, naval auxiliaries, fish catching etc.), will become subject to monitoring and reporting requirements on carbon dioxide emissions (CO2), fuel consumption and cargo carried within all ports and for any voyages to or from a port under the jurisdiction of a Member State. It is estimated that Relevant Ships account for 55% of all ships calling into EU ports and 90% of related emissions.

CO2 Emissions of all Large Ships to be Reported

The requirements are part of a staged process to understand GHG reduction potential prior to possible pricing of those emissions and as such this EU Regulation is considered as a key measure designed to understand how to make shipping ‘greener’.

More specifically by 1st January 2018 companies will be required to monitor emissions for each Relevant Ship on a per-voyage and aggregate on an annual basis by applying the appropriate method chosen in their monitoring plan that should have been submitted to independent verifiers by 31st August 2017.

Subsequently from 2019 and by 30th April of each year, companies will be required to submit to the Commission and to the authorities of the flag states concerned, an independently verified emissions report, during the annual reporting period for each relevant ship under their responsibility.

Finally from 30th June 2019 all relevant ships having performed activities in the previous reporting period and visiting EU ports, must carry on board a valid Document of Compliance (“DoC”), issued by an accredited EU Regulation shipping verifier, that might be subject to inspections by Member States’ authorities.

 

20 Dec 2017

EU Commission approves Maltese tonnage tax scheme

Following an in-depth examination of the Maltese tonnage tax scheme, the EU Commission has conditionally approved under EU State Aid rules the Maltese tonnage tax scheme for a period of 10 years.  The scheme will ensure a level playing field between Maltese and other European shipping companies, and will encourage ship registration in Europe. Malta being the largest flag in Europe, has always been committed to high standards and uniform level of playing field in Europe.

15 Dec 2017

One Planet Summit: 35 countries pledge to reduce maritime transport emissions

The “Tony de Brum” declaration, signed by 35 countries including among others the UK, France, Denmark, Germany, Canada, Malta and Greece in terms of the first One Planet Summit, aimed at adopting the first strategy for reducing greenhouse gas emissions from ships by 2018 and a revised strategy by 2023. These currently account for 3% of global CO2 emissions but they could rise 250% by 2050 if no targeted action is taken.

Malta signs One Planet Summit declaration

This Summit was called for by the President of the Republic of France and jointly convened by the UN and World Bank, following the United States’ announcement that it was withdrawing from the Paris agreement.

The signing ceremony was held on 12th December 2017 and the signatories urged for an ambitious CO2 reduction target to be set, compatible with that determined by the Paris Agreement, including a short-term cap on emissions, the ultimate objective being zero-emissions in the second half of the century.

11 Dec 2017

The EU issues black list of non-cooperative jurisdictions for tax purposes

Late last week, the Finance Ministers of EU member states agreed on a list of 17 countries which according to the EU have failed to meet agreed tax good governance standards.  These countries are all non-EU member states and are the following: American Samoa, Bahrain, Barbados, Grenada, Guam, Korea (Republic of), Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia, and the United Arab Emirates. Most of these jurisdictions have preferential tax regimes, or do not abide by minimum EU standards and standards set by the Global Forum on Transparency and Exchange of Information for Tax Purposes amongst others.

EU release list of countries who have not met agreed tax good governance standards

The Council in its conclusions also provides for 47 other jurisdictions which have committed to addressing certain deficiencies in their tax regimes and to meet the required criteria following communication with the EU.  This list includes jurisdictions such as Turkey, Hong Kong, Jordan and Isle of Man.

This list has been issued with the aim of having a dissuasive effect which encourages jurisdictions to improve their tax systems in order to be able to be taken off the list.  At the same time, the EU also aims to create efficient protective mechanisms to fight the erosion of Member States’ tax bases through tax fraud, evasion and avoidance as a result of the use of such third country tax systems, as the Panama Papers have shown.

Finally, the Council also encourages Member States to take on administrative defensive tax measures in their own jurisdiction such as reinforced monitoring of certain transactions or increases audit risks for taxpayers benefiting from such regimes or structures involving such regimes.

Clearly, it remains to be seen how, and if, such list will have any effect in practice.  However, it is an additional step that the EU has taken in order to promote tax transparency and fight tax avoidance and abuse.

4 Dec 2017

ECJ Judgment on VAT (Di Maura C-246/16)

The European Court of Justice has recently issued an important judgement (Di Maura C-246/16) with regard to VAT and specifically to the interpretation of the provisions of the VAT Directive (Directive 2006/112/EC) for bad debts.

European Court of Justice release new VAT judgement

The Court ruled that, the Member States may not make the reduction of VAT taxable amount, in the event of total or partial non-payment, subject to the condition that insolvency proceedings have been unsuccessful, when such proceedings may last longer than 10 years.  In its ruling the Court made some very important findings in respect to the interpretation of the VAT Directive that might call for changes in the way the directive has been implemented and applied in some of the Member States.

According to the general rule laid down by article 90 par. 1 of the VAT Directive, the taxable amount, for VAT purposes, in case of refusal or total or partial repayment or when the price is reduced after the supply takes place, shall be reduced accordingly. According to the Court and its case law, that provision embodies the principle of neutrality of VAT which requires that the taxable amount, for VAT purposes, is the consideration actually received by the trader and the amount of VAT collected by the authorities should not exceed the tax which the taxable person has himself received.

However, article 90 par. 2 of the VAT Directive, gives to each Member State the power to derogate from the general rule in case of total or partial non-payment. As it was stated by the Court, the objective of such a power given to the Member States, is to take account of the inherent uncertainty of the definitive non-payment of an invoice and with the consideration that the situation of non-payment of the purchase price does not of itself restore the parties to their original situation, unlike cancellation or refusal of payment.  As a result it is for the Member States to decide whether each case shall lead to an entitlement to have the taxable amount reduced or whether such reduction shall not be allowed. Nonetheless, it is underlined that the exercise of the power to derogate from the general rule should be justified so that the measures taken do not undermine the objective of fiscal harmonisation pursued by the VAT Directive.

In any case, it is clearly stated at the ruling of the Court that Member States do not have the power to exclude the correction to the taxable amount altogether in case of a total or partial repayment. Such power would be against the principle of neutrality of VAT which, as already described, requires that the trader as tax collector should not be brought in a position to bear the burden of tax due or paid in the course of his economic activities.

Moreover, according to the principle of proportionality, one of the general principles of EU Law, the measures taken in order to accomplish the objective of the derogation from the general rule, should be appropriate to achieve the objectives stated in that measure and not go beyond what is necessary. In this respect, it was judged that the derogation from the right to reduce the taxable amount altogether might not be the only effective means towards that direction and mainly it might not be the less onerous for the taxable person who pre-finances the VAT by collecting it on behalf of the State.

4 Dec 2017

Malta elected to the Council of the International Maritime Organization

Malta was elected to the Council of the International Maritime Organisation (IMO) for the 11th consecutive time. The IMO regulates the maritime sector within the United Nations. In this election, which took place during the 30th edition of the General Assembly of this same organisation in London, Malta was elected from amongst 20 countries in the same category having special interest in the maritime sector.

Malta elected to Council of the International Maritime Organization for 11th time in a row

This prestigious achievement confirms that Malta, which has one of the largest registers of merchant ships in the world, has attained the respect of the international community within this sector.

Early last week, Minister for Transport, Infrastructure and Capital Projects Ian Borg addressed the General Assembly. The Minister stated that our country will continue giving its support to the IMO and continued by mentioning the financial contribution that Malta has made to the Programme of Integrated Technical Cooperation during the last two assemblies.

He further expressed his satisfaction at the Maltese Government’s intention to seek to contribute more to this programme. Minister Borg, who led the delegation during the assembly, thanked Transport Malta officials who worked to achieve this success, with the cooperation of the Ministy for Foreign Affairs and Trade Promotion.