Brussels, 03/12/2004 (Agence Europe) - On Wednesday, the European Commission decided to allow Denmark to alter its tonnage-based flat-rat tax scheme (the "Tonnage Tax") to make it more favourable to shipping companies. This will be a technical alteration, allowing for a better definition of what is and is not eligible for the "Tonnage Tax". In future, this alteration will allow the Danish scheme to cover revenue raised by renting out sales areas on board passenger ships (for example, a ship owner renting out a space on board the ship to a restaurant), and there will be no tax on this income. Denmark has estimated the cost of this measure at around two million EUR a year.
The European Commission, which has already returned similar decisions for other countries, feels that this modification is compatible with Community provisions on State aid. It believes that this alteration will make the Danish flat-rate scheme more coherent from a taxation point of view. Furthermore, the anti-abuse measures of the tax scheme guarantee that no tax will be lost to non-eligible activities, the European Commission states. However, it reminds Denmark that its flat-rate tax scheme must be brought into line with the new European guidelines on aid to maritime transport, by no later than the end of June 2005.