The Shipping Deputy Ministry has recently announced a new Green Incentive Programme to reward vessels that demonstrate effective emissions reductions. From fiscal year 2021, annual tonnage tax will be reduced by up to 30% for each vessel that demonstrates proactive measures to reduce its environmental impact, ensuring shipowners are rewarded for sustainable shipping efforts. Hence, successful applicants will receive their discounts by next year.

Such incentives are given so as to encourage greater environmental sustainability in the shipping sector. At the same time, it provides the opportunity to enhance green technologies in a much-needed period in time. As a further benefit to the already favorable environment that the Cyprus shipping sector offers, tax benefits may also cover profits from the sale of vessels, interest earned and future dividends being paid.

As commented by the Deputy Minister for Shipping, Vassilios Demetriades “As a leading maritime nation, we have an obligation to support efforts in reducing GHG emissions. We believe that flag states are well-positioned to support ship owners in making sustainable shipping choices which they can benefit from both operationally and financially. Striking the right balance between the green transformation and competitiveness is a challenge but also presents opportunities”.

For further information and assistance, feel free to get in touch with Marianna Konstanta, advocate in our firm.