Brian Cowen (Laois-Offaly, Fianna Fail)

I have been informed by the Revenue Commissioners that no more than four companies have opted to participate in the tonnage tax scheme and, accordingly, paid tax in that manner. The total tax paid under the scheme in 2003 was €100,000. There does not appear to be cause for concern about the appropriateness of tonnage tax to the circumstances of any of the companies in question. The tonnage tax system was introduced in the Finance Act 2002 to help the Irish shipping sector when, like its counterparts in other EU member states, the sector faced the possibility of shipping companies relocating their economic activities to other countries, including countries with a tonnage tax regime.

Several member states have introduced a special low tax regime, known as tonnage tax, under which tax is paid by reference to the tonnage of ships. The system applies in 12 EU member states, including Ireland. The member states' tonnage tax regimes had to be cleared with the European Commission for state aid purposes. The Commission is conscious of the need to protect the EU shipping sector. It took that key objective into account when it approved the various tonnage tax regimes, including that of Ireland.

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