Shipping Taxation for a Norwegian Investor Hans Olav Hemnes Advokat (H)

Transcription

1 Shipping Taxation for a Norwegian Investor Hans Olav Hemnes Advokat (H)

2 Shipping Taxation for a Norwegian Investor Short overview of Norwegian tax rules of interest for a Norwegian investor in German shipping projects How to organise ownership from Norway in a German shipping project Side 2

3 Tax environment Applicable Norwegian tax rules for investment in German shipping Side 3

4 NORWEGIAN TAX RULES Today's tax system Shareholders 28% Business income Partisipants 48,16% Exempt method >0,84% Own home Financial income Self empl GP, LP LP, Tonnage Taxed 0% 28% 51% 48,16 % 0% (but tonnage tax) Page 4

5 NORWEGIAN TAX RULES Today's tax system Shareholder model (2006) Almost full (double) taxation of dividends, with a small deduction for a risk free interest rate ( skjermingsfradrag ) Exempt method (2004) Lts. s are almost tax free for dividends and gains on EEA shares. However 3% must be taken to income to neutralise (deductible) costs. Page 5

6 NORWEGIAN TAX RULES Exempt method Inside - Outside Should be owned directly! +28% Norwegian Ltd ( ) 0,84% 28% Norwegian EEA Ltd High tax Country Unit trust EEA GP, LLP,, Ltd Under 10%/2år High tax Country Outside EEA Low tax contry outside the EEA EEA Low Tax Country Not in reality established Exempt method Outside exempt method Page 6

7 NORWEGIAN TAX RULES Exempt method Norwegian exempt method is favourable and competitive: Interest is always tax deductible No minimum ownership requirements or holding period for EU/EEA shares Both shares and participation interest in a partnership ( KS, KG, LP is included) Side 7

8 NORWEGIAN TAX RULES Partnerships Gains and distributions taxable, with a small deduction for a risk free interest rate ( skjermingsfradrag ) But: The tax treaty with Germany may limit Norway s right to tax Dividends tax free Gains exempt, as a main rulemen 3% LP* Running income: The participants are taxed for the years result But: Gains and distributions from underlying companies that are comprised by the exempt method, is exempt (however 3 % must be taken to income And: German shipping income are normally exempt, only taxed in Germany B AB, A/S, AG Ltd, GP, LP, Ltd Page 8 *It makes no difference whether the LP is in a low tax jurisdiction

9 NORWEGIAN TAX RULES Norwegian Tonnage Taxation Tonnage taxed Companies qualifying for tonnage taxation: and A (SE?) Similar EU/EEA-companies taxable in Norway N. tonnage taxed, Ltd etc 3% 3% 3% GP, LLP* NOKUS, GmbH Assets qualifying for tonnage tax: Vessels Other tonnage taxed and A Foreign partnerships NOKUS (CFC) companies 3% min. ownership Legal assets: Financial assets and listed shares Illegal assets: Shares in ordinary taxed companies (not listed) Page 9 *It makes no difference whether the LP is in a foreign or even a low tax jurisdiction

10 NORWEGIAN TAX RULES Norwegian Tonnage Taxation Some other tonnage tax rules: A (marginal) tonnage tax is paid instead of the ordinary tax on shipping income Flag requirements (60% EU/EEA flag) Financial income is taxable with 28% (but exempt method for the listed shares) Only strategic, commercial and technical management is legal activities Maximum debts (above 70% equity can will lead to taxation as financial income) 10 years lock-in period (but the consequence of breach is no re-entry within the 10 years period) The tonnage taxed entity may be thrown out with taxation. As a starting point no exit tax,- for companies that entered after Can have severe consequences for companies that entered earlier. Side 10

11 How to organise ownership from Norway in a German shipping project Side 11

12 HOW TO ORGANISE Shipping projects Ordinary taxation Dividends tax free Gains exempt 3% to income (max 0,84% tax) 15% WHT if less than 25% ownership3ow% GmbH (AG) Taxation in Germany ordinary tax regime: 15,825 % income tax 13-18% Local trade tax Page 12

13 HOW TO ORGANISE Shipping projects Ordinary taxation Norwegian exempt method: Distributions tax free Gains exempt 3% to income (max 0,84% tax) Norwegian German Double Tax Treaty: Exempt method 3% KG Running income (years result): Taxation in Germany only, the German Norwegian Double Tax Treaty Taxation in Germany Normal tax regime: 15,825 % income tax 13-18% Local trade tax on KG level Page 13

14 HOW TO ORGANISE Shipping projects Ordinary taxation Dividends tax free Gains exempt 3% to income (max 0,84% tax) 3% 15% WHT if less than 25% ownership 0% WHT if more than 25%3ow% GmbH (AG) Taxation in Germany tonnage tax regime: 0,92 EUR for each 100 net tons up to 1000 tons 0,69 EUR for each 100 net tons from 1000 tons up to tons 0,46 EUR for each 100 net tons from to tons 0,23 EUR for each 100 net tons above tons Page 14

15 HOW TO ORGANISE Shipping projects German tonnage taxation Dividends tax free Gains exempt 3% Can Germany be a low tax country? (Outside the exempt method?) GmbH (AG) Tonnage taxation in Germany Page 15

16 HOW TO ORGANISE Shipping projects Ordinary taxation Norwegian exempt method: Distributions tax free Gains exempt 3% to income (max 0,84% tax) GmbH Norwegian German Double Tax Treaty: Exempt method 3% KG Taxation in Germany tonnage tax regime: 0,92 EUR for each 100 net tons up to 1000 tons 0,69 EUR for each 100 net tons from 1000 tons up to tons 0,46 EUR for each 100 net tons from to tons 0,23 EUR for each 100 net tons above tons Page 16

17 HOW TO ORGANISE Shipping projects Ordinary taxation Tonnage taxed Can KG be owned in the tonnage tax system? 3% KG Taxation in Germany tonnage tax regime: 0,92 EUR for each 100 net tons up to 1000 tons 0,69 EUR for each 100 net tons from 1000 tons up to tons 0,46 EUR for each 100 net tons from to tons 0,23 EUR for each 100 net tons above tons Page 17

18 HOW TO ORGANISE Shipping projects Ordinary taxation Provided that effective management is in Germany. taxation in Germany only, under the tax treaty: Running income/years result taxable in Germany only Distributions taxable in Germany only, but strict formal rules to be exempt Gains may also be tax exempt under the treaty, provided that the KG is not seen as a German tax subject Complicated rules, must be considered case by case KG Taxation in Germany tonnage tax regime: 0,92 EUR for each 100 net tons up to 1000 tons 0,69 EUR for each 100 net tons from 1000 tons up to tons 0,46 EUR for each 100 net tons from to tons 0,23 EUR for each 100 net tons above tons (Will be recalculated to a small income amount for the individual owner) Page 18

19 Hans Olav Hemnes Advokat (H) Partner Tlf? BDO Advokater Side 19

20 Norwegian Tonnage tax 2011 Aksjeselskap, allmennaksjeselskap og tilsvarende selskap hjemmehørende i annen EØSstat som nevnt i skatteloven 8-10, skal svare tonnasjeskatt, jf. skatteloven 8-16, etter følgende satser: - 0 kroner for de første nettotonn, - deretter - 18 kroner per dag per nettotonn opp til nettotonn, - deretter - 12 kroner per dag per nettotonn opp til nettotonn, - deretter - 6 kroner per dag per nettotonn. Side 20