Norwegian shipowner JJ Ugland is facing a headache over its qualification for the country’s tonnage tax regime.
The Grimstad bulker specialist’s annual report reveals that subsidiary Ugland Shipping was in talks last year with the Norwegian Tax Administration (NTA) over the matter.
The NTA raised the question of whether the unit’s activities in 2018 and 2019 should have been taxed under ordinary corporate rates on profit instead of the cheaper flat rate under the tonnage tax.
JJ Ugland said that at the end of January this year, it received “signals” from the authority that a decision will be made that the company should submit a tax return pursuant to corporate tax for these years.
“The company has a different opinion on the issue,” the shipowner added.
The group said it has been given a chance to comment and a final decision has not been made.
All the companies’ 14 supramaxes and ultramaxes are Norwegian-flagged. JJ Ugland also operates tankers and offshore vessels.
The report does not reveal why vessels may be considered to have been ineligible for the tonnage tax in those years, or which ships are involved.
JJ Ugland has been contacted for more information.
The group also revealed it had formed Ugland Bulk Shipping in February to buy the bulker fleet of Ugland Shipping.
Norway generally assesses corporate activities at a tax rate of 22%.
Under the tonnage tax, ships of more than 25,000 gt are taxed at NOK 6 ($0.60) per day for every 1,000 tonnes.
The annual report for 2019 showed a pre-tax profit of NOK 66m, while the figure for 2018 was NOK 41m.
In 2021, Ebitda rose to NOK 272m, up from NOK 85m in 2020.