Strategic Priorities


Secure a stable and competitive tax framework recognising the intricacies and the global character of the shipping industry.

Any changes to the current VAT arrangements for passenger transport by sea would be difficult, complex and would lead to a distortion of competition.

The shipping industry manages the supply security of energy, food and other commodities worldwide and in the EU. A stable and robust tax framework supports the industry in this role. The EU shipping industry, competing with non EU shipowners, requires an equivalent tax environment unaffected by the horizontal tax policies and regulations in the EU and with deference to the shipping institutional tax regimes in Member States.

Of particular interest for the EU shipping industry are EU discussions on the reforms of the EU VAT regime, Corporate Taxation, Energy taxation, Digitalisation and the corresponding talks at the OECD and the UN levels.

In the VAT field, ECSA is particularly concerned with possible changes to the VAT treatment of passenger transport by sea. The European shipping industry actively advocates for the retention of the current system which provides for a simple working solution for businesses that strongly rely on a stable VAT framework that creates no distortion of competition.

The current VAT system has served the international nature of the shipping industry and should therefore be retained. Any changes will jeopardize Europe's social, economic and territorial cohesion by making passenger traffic to the peripheral and insular regions more expensive, with negative social impacts as a consequence.

Taxation of shipping income is regulated at several levels. It is regulated at national level, by means of specific provisions for shipping. At the international level the OECD’s Model Tax Convention and the corresponding UN Convention provide guidelines and legal methodological tools for tax issues which have an inherent international - in most of the times bilateral between two national legal orders - character and application with reference to the prerogative application of a national shipping rule or regulation. ECSA advocates that while the EU should actively influence the international discussions at G20/OECD/UN levels to ensure legal and tax certainty, stability and continuity. EU tax related rules and regulations should respect this. Stricter or more difficult to apply EU rules will harm the competitive position of EU shipowners and should thus be avoided. Such a scenario is not beneficial for the competitiveness, growth and jobs of the EU and would not improve the international tax system.

In this regard, ECSA follows closely the negotiations on the common corporate tax base, the taxation of digital services and the BEPS implementation measures in view of possible implications on the taxation of shipping income. ECSA strongly advocates the exclusion of shipping income subject to tonnage taxation from the Common Corporate tax base.

The availability of tax-free bunkers and luboils in Article 14 of the Energy Taxation Directive (ETD) are a reflection of the international norm and standard practice all over the world. A continuation of the relevant exemption under the ETD is therefore essential for EU companies, so as to be able to compete on the same footing as shipowners and suppliers from outside of the EU. This enables EU shipping companies to provide the transport (and other) services on which the wider economy relies, at a price that is competitive and affordable.

The 2011 Commission proposal recognised these arguments and left the exemption for international maritime transport unchanged. It also realised that unilateral actions from Member States would create a risk of competitive distortions. The arguments remain equally valid today.

Any revision of the ETD must take into consideration the global nature of the industry and the IMO Strategy for the reduction of GHG emissions from ships so as not to jeopardise the process with regional measures that may be counterproductive. ECSA considers that the ETD should be updated to provide for a technology neutral tax exemption for energy carriers (i.e. fuels and electricity, including shore-side to merchant vessels and to dredgers). This will lead to equal treatment of the energy supplies to the shipping industry thus closing the gap between heavy fuel oil, alternative fuels and electricity which hampers investments and the uptake of cleaner technologies such as shore-side electricity, fuel cells, methanol etc.

ECSA has also been highlighting the considerable problems being faced by the industry in view of the very varied digital tax reporting (DTR) requirements in Member States and advocating for a harmonised approach in Member States.


Therefore, ECSA would like to work with the EU regulators to:

  • maintain the current legal framework in the field of VAT treatment of vessels
  • adopt a technology-neutral approach when considering revisions to the Energy Taxation Directive in order to provide for the equal treatment of energy supplies to the shipping industry
  • maintain the exclusion of shipping income subject to tonnage taxation from the Proposal for a Common Corporate Tax Base
  • adopt a harmonised approach to digital tax reporting requirements in Member States