GERMAN FEDERAL AUDIT OFFICE CALLS TO REVIEW TONNAGE TAX SCHEME
In April, the German Federal Audit Office (Bundesrechnungshof) issued a report with recommendations to consolidate and strengthen the German federal budget. One of the recommendations suggests reviewing the current tonnage tax scheme, which exempts shipping companies from standard corporate taxation.
The Bundesrechnungshof has stated that there is currently no conclusive evidence that the tonnage tax benefits German shipping. However, between 2021-2024, the scheme has provided tax savings for shipping companies amounting to over EUR 22.5 billion. The report is also highly sceptical about the value of the tonnage tax for German taxpayers. “Considering that the stock of ships has been declining for years and that the number of seafarers employed has been declining, positive effects of tonnage taxation for Germany as a shipping nation are not readily apparent,” the authority writes in the report.
The Federal Audit Office is particularly critical of the tonnage tax because the system operates without limits and demands an immediate evaluation of the tonnage tax to examine its impact which suggests that the German tonnage tax scheme should at least cap shipping companies’ tax-free income. Politically, there is minimal interest in altering the taxation of shipping, including in Germany, as stated by the Bundesrechnungshof. The report indicates that while the German government acknowledges the main criticisms of the tonnage tax, it regards "tonnage taxation as a central building block for Germany’s competitiveness as a maritime nation."
Source: ShippingWatch