(Non) Taxation on dividends from exploitation of owned vessels – Manolis Eglezos & Associates
The taxation scheme for maritime income in Greece provides that dividends deriving from the
exploitation of a ship owned by the party distributing the dividends are not taxable.
So, in a situation where the shipowning company has income from hires arising from chartering of
its own vessel, it can distribute profits to the shareholders as dividends and such dividends are not subject
to tax.
Further, where the shareholding structure provides for a corporate shareholder, who receives dividends
and further distributes them to an individual who is the ultimate shareholder, again such dividends
are not subject to tax, since they originate from income gained through an owned vessel. The
individual shall declare the amounts received as dividends in the annual tax declaration, and will not be
taxed on the amounts declared as dividends from owned vessel exploitation.
On the other hand, where a company charters a vessel and then sub-charters her, thus gaining the hire difference, income accrues from exploitation of a vessel that does not belong to it. Accordingly, the
dividends that are distributed are taxable, as they arise from exploitation of a non-owned vessel. Tax
planning of maritime groups needs to take into account this and act accordingly.
Last, the fact dividends from income of an owned vessel are non-taxable, does not suggest the individual
may declare whatever amount he wishes. There must be relevant corporate resolutions in place,
which authorise the distribution of dividends and the amounts quoted there should be consistent with
the amounts actually received by the individual.
The legal column was written by Manolis Eglezos, Attorney at law,
Manolis Eglezos & Associates Law Firm, Attorneys at Law and Consultants