Key Documents
The Government made a commitment to reforms for the shipping industry during the Federal election campaign in August 2010, and subsequently to an integrated tax and regulatory policy reform package. The Stronger Shipping for a Stronger Economy package has four key elements:
- tax reforms to stimulate investment in Australian shipping and to foster the global competitiveness of the shipping industry;
- a simplified three tier licensing framework for participation in the coastal trade;
- establishment of an Australian International Shipping Register to put Australian companies on a level footing with their international competitors; and
- establishment of a Maritime Workforce Development Forum to progress key maritime skills and training priorities.
The Senator the Hon Mark Arbib and the Hon Anthony Albanese, MP, have released for public consultation exposure draft legislation and associated explanatory material to give effect to the tax component of those reforms.
These proposed amendments would provide a number of tax incentives designed to revitalise the Australian shipping industry in particular circumstances. These incentives include:
- an income tax exemption for ship operators;
- provision for accelerated depreciation of vessels via a cap of 10 years to the effective life of those vessels;
- roll-over relief from income tax on the sale of a vessel;
- an employer refundable tax offset; and
- an exemption from royalty withholding tax for payments made for the lease of shipping vessels.
Subject to the passage of legislation, these changes are expected to come into effect on 1 July 2012.