BRUSSELS has approved a Norwegian request to extend its tax refund scheme to another 750 seafarers, Lloyds List reports
Norway's 'net wage' scheme constitutes state aid but falls within the objectives of the European Union maritime guidelines and has now got the green light.
Brussels-based EFTA Surveillance Authority said in a statement that it had "decided not to raise objections to the notified alteration to the tax refund scheme for seafarers aboard vessels in the Norwegian Ordinary Shipping Registers, extending the reimbursement of seafarers' income tax and social security contributions paid by the employer to safety crew on board passengerships covering the distance Bergen-Kirkenes exposed to competition."
The refunds are designed to make it cheaper for owners flying the Norwegian flag to employ European crews, thereby improving the flag's competitiveness with regard to "flags of convenience" and preventing flagging out.
Lloyds List reports the measure looks set to cost the Norwegian taxpayer around €11m ($16.5m) a year, based on figures calculated for 2007.
EU maritime guidelines allow governments to introduce measures for "maintaining and improving maritime know-how and protecting and promoting employment for European seafarers".
But senior European Commission officials say on their own the tax concessions are not enough to stave off the continuing decline in European ratings and is about to take action to prevent the number of EU seafarers reaching "zero"