On 15 November 2017, the Norwegian Government announced that the discussions with ESA regarding an amended tonnage tax regime (limitations on bareboat chartering, amended flag requirement etc.) are still ongoing, and that the Government has asked ESA to accept certain transitional rules to facilitate the transition to an amended regime.
The amended tonnage tax regime will take effect from 1 January 2018, but according to the Norwegian Government, ESA has indicated a willingness to approve transitional rules for the period 1 January to 31 October 2018 to enable companies in the regime to adapt to the proposed new rules on bareboat chartering. Companies who do not adapt to the proposed new rules by 31 October 2018, will have to exit the regime and be taxed under the ordinary tax regime for November and December 2018.
The Government also informs that the current discussions with ESA are mainly related to the topic of bareboat chartering out. There are no news as to what the new requirements from ESA will be in this respect. The Government has also proposed that time and voyage chartering in of vessels not registered in the EEA shall be limited to 90% of total tonnage in the group. This is assumed to be accepted by ESA. As regards flag requirements, ESA has indicated that new requirements will only apply to new groups entering into the regime after 1 January 2018, i.e. companies that are currently under the tonnage tax regime is therefore assumed not be affected by amendments to the flag requirements. The Government has also proposed certain amended requirements for vessels without propelling machinery (barges), and that companies can adapt to the proposed new requirements for such vessels up until 31 October 2018.
The Government emphasizes in the announcement that ESA has not given any approvals yet, neither for the proposed amended tonnage tax regime nor the proposed transitional rules.