Profits from Shipping Activities

The following are exempt from taxation in accordance with the provisions of the Merchant Shipping (Fees and Taxing Provisions) Law and are subject to tonnage tax:

• The income of a qualifying ship-owner from the operation of a qualifying Cyprus, community and/or foreign ship (under conditions), in a qualifying shipping activity.
• The income of a qualifying charterer from the operation of a qualifying Cyprus, community and/or foreign ship (under conditions), in a qualifying shipping activity.
• The income of a qualifying ship operator from the provision of ship management services of the crew and/or technical administration services.
• Dividends paid directly or indirectly from the profits mentioned above.
• Salaries or other benefits paid to the masters, officers and the crew of a qualifying Cyprus or Community flag ship in a qualifying shipping activity.

For the purposes of the above-mentioned Law, in the case of a Cyprus ship, the term “ship-owner” also includes the bareboat charterer.