Dáil Éireann debate -
Thursday, 25 Mar 1999

Vol. 502 No. 5

Written Answers. - Maritime Transport.

Ivor Callely

Question:

46 Mr. Callely asked the Minister for the Marine and Natural Resources the fiscal measures the Government is permitted to assist with State aid on maritime transport under EU community guidelines; and if he will make a statement on the matter. [8634/99]

Minister for the Marine and Natural Resources (Dr. Woods)

There is a range of fiscal and social measures permissible under the community guidelines on state aids to maritime transport to facilitate the competitiveness of the EC fleet and the employment of the highest possible number of community seafarers. The guidelines published in July 1997 clarify what aid schemes may be introduced in order to support the community maritime interest.

These include allowances for accelerated depreciation on ship investments, reserved profits on ships sales linked to reinvestment in ships, corporation tax alleviation measures or replacement tonnage taxes, reduced rates of social insurance and income tax for EU seafarers on board ships registered in a member state, crew relief and shipping investment aid.

All State aid measures must, of course, comply with notification and approval requirements specified in the guidelines and no aid measures can be put into effect or financial commitments to potential shipping industry beneficiaries entered into in advance of Commission approval.

State aid measures to help the Irish shipping industry expand both the fleet and Irish seafarer employment include a corporation tax rate of 10 per cent which applies to trading income from certain qualifying shipping activities.

Capital allowances are available in relation to certain expenditure incurred on ships and for offset against qualifying shipping, activities.

A special £5,000 income tax allowance for seafarers, who are at sea on voyages to or from foreign ports for at least 169 days in a tax year, was introduced in the Finance Act, 1998. A provision included in this years Finance Bill will extend this relief to seafarers servicing mobile or fixed rigs, platforms or installations in Irish waters.

Provision was made in the Social Welfare Act, 1997, which allows for refunds to certain employers in the shipping industry in respect of the employers portion of the social insurance contributions aid in respect of seagoing employees. It is intended shortly to extend this scheme for a further four years to 2004 and to restrict eligibility under the scheme to employers of seafarers on EU registered ships.

The question of strengthening existing fiscal alleviation measures for the industry is the subject of ongoing review, in full consultation with the Irish Chamber of Shipping and other national representative bodies in the shipping industry, having regard to what is permissible under the EU Community guidelines and competing demands on Exchequer resources.