Portuguese Tonnage Tax Approved

14 November 2018

The new legal framework for the national merchant navy establishes a special system for determining the tonnage tax base and a specific tax and contribution scheme for maritime activity as well as a simplified vessel and vessel register. The new Decree-Law precludes the following:

  • A special regime for determining the taxable income on the basis of tonnage tax;
  • An exemption from personal income tax for ships' crew members of covered by the scheme;
  • A special social security rate of 6% (4.1% borne by the employer and 1.9% borne by the worker);
  • A registration system that implements what is established in the Decree-Law and that creates the National System of Vessels and Seamans (SNEM), integrating the procedures related to the registration and digitizing all related acts, running the entire process electronically.

However, the determination of the taxable income on the basis of the tonnage tax mechanism is dependent on the fact that the crew of the vessels or vessels is composed of at least 50% of crew members with Portuguese nationality, a European Union country, the European Economic Area Portuguese-speaking country, except in duly substantiated exceptional cases.