IP/07/941

Brussels, 27^th June 2007

Maritime transport: Commission authorises income tax and social insurance refund mechanism for Swedish shipping

The European Commission has today approved the modified reintroduction of a mechanism in Sweden to refund seafarer's income tax deducted at source as well as employers' social insurance contributions in respect of Swedish tax liable seafarers working on Swedish flagged vessels. The measure is expected to decrease flagging-out of the European maritime fleet, preserving employment and maritime know-how in the Community.

The Commission has examined the measure and has authorised it after checking its compliance with Community rules, notably:

• The aid is in the form of a refund of tax, employers' social insurance payments and the additional fee on paid wages, it is transparent and no overcompensation is possible.
• It is only available for Swedish tax liable seafarers working on board Swedish flagged vessels.
• In respect of seafarers working on board vessels (including ro-ro ferries) providing scheduled passenger services between ports of the Community, shipping aid shall be granted only to European citizens^[1].
• It is designed to stimulate the Swedish shipping sector by making seafarers more attractive to employ but it has requirements in relation to training places and insurance cover.
• The measure is also extended to publicly procured transport domestic traffic (cabotage) services but only as and from 1 January 2009 when the current contract for the only qualifying such service comes up for renewal.

The measure also covers an additional fee levied on paid wages (allmän löneavgift). The previously authorised scheme was approved by the Commission in 2001^[2]. The modified scheme will run from now until 17 January 2011 and is expected to cost up to SKK 1800 million (€ 200 million) a year.

^[1] Citizens from the European Communities and the European Economic Area.

^[2] State Aid No N 542/2001, 30.10.2001, SG(2001) D/292010.