Tonnage Tax for Shipping Industry

TONNAGE TAX FOR SHIPPING INDUSTRY

The tonnage tax scheme for eligible shipping companies (dredgers included) was introduced in India with effect from 2005/06 and provides for a tonnage-based presumptive tax. Indian shipping companies now have the option to pay taxes on tonnage income in place of normal taxable income. There is a lock in period of 10 years. If a company opts out, it is debarred from re-entry for 10 years.

Tonnage income is to be taxed at the normal corporate tax rate. Tax is payable even if there is a loss in a year. Tonnage income is separately calculated for each qualifying ship by multiplying the number of days in the previous year with the daily tonnage income as per specified slab rates.

Tags: Tonnage Tax in India