S.L. 234.43 Art. 3Interpretation. Cap. 234 Cap. 123

(1) For the purposes of these regulations and unless the context otherwise requires –

"the Act" means the Merchant Shipping Act;

''dividend'' has the same meaning as is assigned to it by article 2 of the Income Tax Act;

"EU Maritime State Aid Guidelines" refers to the Community Guidelines on State Aid to Maritime Transport as may be in force from time to time;

"genuine shipping organisation" means a shipping organisation which, has assumed risks and responsibilities related to the operation of a tonnage tax ship or to the carrying out of shipping activities;

"group" shall refer to:

(a) two or more shipping organisations which are owned and controlled, directly or indirectly, as to more than fifty per cent by the same persons; or

(b) two or more shipping organisations which are controlled directly or indirectly by the same parent;

''operation'' in respect of a tonnage tax ship includes the operation of such ship in any shipping activities, whether under charter or under any other commercial arrangement and "operator" shall be construed accordingly: Provided that, for the purposes of these regulations, a shipping organisation shall not qualify as the operator of a tonnage tax ship where the ship has been chartered out by the said shipping organisation on bareboat charter terms unless:

(a) the ship is bareboat chartered to a shipping organisation forming part of the same group as the aforementioned shipping organisation; or

(b) the shipping organisation is a genuine shipping organisation and demonstrates, to the satisfaction of the Registrar-General, that the ship was bareboat chartered due to short-term over-capacity and the term of the charter does not exceed three (3) years.

Provided that, for the purposes of paragraph (b) above, the percentage of net tonnage operated by the group on a bareboat charter basis is below fifty per cent (50%) of the net tonnage operated by the group.

Provided further that, for the purposes of paragraph (b) above, the term ‘short-term over-capacity’ shall refer solely to ships acquired (bought or chartered) by the shipping organisation for the purposes of carrying out its own shipping activities and shall not include any ships specifically acquired (bought or chartered) for the purposes of chartering out on a bareboat basis,

"parent" shall refer to:

(a) a ‘parent organisation’ as defined hereunder; or

(b) an undertaking that meets all of the following characteristics:

- power over the said shipping organisation, based on the current ability to direct the relevant activities which significantly affect returns;

- exposure, or right, to variable returns from its involvement with the said shipping organisation; and

- the ability to use its power over the said shipping organisation to affect the amount of the person’s returns.

"parent organisation" shall refer to an organisation which -

(a) has a majority of the members’ voting rights in another shipping organisation (a subsidiary organisation); or

(b) has the right to appoint or remove a majority of the members of the board of directors or persons entrusted with the administration of another shipping organisation (a subsidiary organisation) and is at the same time a member of that shipping organisation; or

(c) has the right to exercise a dominant influence on matters relating to the strategic and/or commercial management of a shipping organisation (a subsidiary organisation) of which it is a member, pursuant to a contract entered into with that shipping organisation or to a provision in that shipping organisation’s memorandum or articles of association; or

(d) is a member of a shipping organisation and controls alone pursuant to an agreement with other members of that shipping organisation (a subsidiary organisation), a majority of members’ voting rights in that shipping organisation; or

(e) holds a participating interest in another shipping organisation and actually exercises a dominant influence over the shipping organisation (a subsidiary organisation) or manages the subsidiary organisation on a unified basis together with it;

"Registrar-General" shall have the same meaning as assigned to it in the Act;

"ship" shall have the same meaning as is assigned to it in article 2(1) of the Act and shall, to the extent that they are involved in the international carriage of goods or passengers by sea in accordance with the EU Maritime State Aid Guidelines and provided that they satisfy the criteria set out in these regulations, also include the vessels listed hereunder:

(a) cable laying ships;

(b) pipe laying ships;

(c) crane vessels;

(d) research vessels; and

(e) multi-purpose, break-bulk and other types of support vessels:

Provided that the following ships are excluded for the purposes of these regulations:

(a) fishing and fish factory ships;

(b) private yachts and ships used primarily for sport or recreation;

(c) fixed offshore installations and floating storage units;

(d) non-ocean going tug boats and dredgers;

(e) ships whose main purpose is to provide goods or services normally provided on land;

(f) stationary ships employed for hotel and or catering operations (floating hotels or restaurants);

(g) ships employed mainly as gambling and/or casinos (floating or cruising casinos);

(h) non-propelled barges;

(i) any other description of ship which may be determined, from time to time, by the Registrar-General, as not being engaged in the international carriage of goods or passengers by sea.

''shipping activities'' means:

(a) the international carriage of goods or passengers by sea in terms of the EU Maritime State Aid Guidelines and such other activities that have been approved or considered as eligible for tonnage tax purposes by the European Commission;

(b) such activities as are integral or directly linked to the business of operating tonnage tax ships, when carried out in conjunction with activities described in paragraph (a) above;

(c) ancillary activities qualifying in terms of regulation 7 hereof, when carried out in conjunction with activities described in paragraph (a) above;

''shipping organisation'' shall have the same meaning assigned to it in article 84Z(1) of the Act:

Provided that for the purposes of these regulations, such shipping organisation shall be an organisation duly organised and existing under the laws of a Union State;

''ship manager'' means a shipping organisation which is established in the Union that:

(a) has assumed responsibility for either or both of the technical or crew management of a ship or ships referred to in regulation 6(1)(b) hereof; and

(b) complies with international standards and fulfils requirements established under the law of the European Union; and

(c) satisfies such conditions as may be laid down by the Registrar-General; and

(d) specifically includes such activities among the objects contained in its Memorandum of Association; and

(e) registers with the Registrar-General by submitting to him in writing the following particulars:

(i) the name of the organisation and a unique identification number;

(ii) the address of the registered office of the organisation;

(iii) the name, unique identification number and tonnage of the ship or ships for which it has assumed responsibility as set out above;

(iv) any other documentation that may be required for the purposes of satisfying compliance with the respective requirements of these regulations:

Provided that the particular shipping organisation shall notify the Registrar-General in writing every time any alterations in such particulars occurs;

''ship management activities'' means those activities carried out by a ship manager and consisting in, but not limited to, the provision of competent personnel to supervise the management and general efficiency of a ship referred to in regulation 6(1)(b) hereof, and/or the provision of other technical management services usually performed by the ship manager as defined by the Baltic and International Maritime Council (BIMCO) Standard Ship Management Agreement, in its up-to-date version; ''tonnage tax ship'' means a ship that is declared to be a tonnage tax ship by the Minister in terms of regulation 4 hereof;

''Union State'' means a Member State of the European Union (including, for the avoidance of doubt, Malta) or of the European Economic Area;

''Union ship'' means a ship registered under the laws of a Union State and the terms ''Union flag'' and ''Union-flagged'' shall refer to a ship registered in any such State:

Provided that in the case of a ship registered in any Union State other than Malta, the ship shall only qualify as a ‘Union ship’ for the purpose of these regulations, if an amount equivalent to the Malta tonnage tax is paid to the Registrar-General;

Provided further that relief shall be granted for any tonnage tax imposed under the laws of such Union State in respect of the said tonnage tax ship operated by the said shipping organisation subject to an amount of minimum tonnage tax equivalent to twenty-five per cent (25%) of the annual tonnage tax that would have been payable had the ship been registered under Part II or IIA of the Act.