Eligibility Requirements

The Shipping Reform (Tax Incentives) Act 2012 (the Incentives Act), provides a mechanism for the shipping industry to obtain certification as an initial step in gaining access to a range of taxation concessions for the shipping industry. Additional criteria are contained in the Income Tax Assessment Acts as amended by the Tax Laws Amendment (Shipping Reform) Act 2012 which is administered by the Australian Tax Office (ATO). Eligibility conditions have been established to encourage ship ownership and ship operations in Australia, and the employment of Australian seafarers.

The Incentives Act:

  • Sets out the conditions for vessels to access the income tax exemption (ITE) and other tax concessions;
  • Provides a framework for the Minister or delegate to issue applicants with a notice and subsequently a certificate confirming they have satisfied the requirements in relation to registration, training requirements and the management activities that must be undertaken in Australia;
  • Provides for the Department to collect and collate data in relation to these reforms so as to assess their progress; and
  • Provides for decisions of the Minister or delegate to be reviewable by the Administrative Appeals Tribunal.

Eligible vessels

A vessel must be registered in either the Australian General Register or the Australian International Shipping Register. The vessel must be over 500 gross tonnes and operating as part of the ‘blue water fleet’.

The blue water fleet does not include the following vessels:

  1. recreational vessels;
  2. fishing vessels and fishing fleet support vessels;
  3. offshore industry vessels;
  4. inland waterways vessels;
  5. salvage vessels;
  6. tugboats;
  7. vessels operating wholly or mainly within a harbour;
  8. vessels operating wholly or mainly from a stationary position;
  9. government vessels; and
  10. vessels owned or operated by:
    1. the Australian Defence Force; or
    2. the defence force of another country.

Some of the excluded categories are defined further in the Act. In particular the following definitions may be helpful in assessing whether a vessel is an eligible vessel.

  • Government vessel means a vessel:
    1. that belongs to any of the following entities (a government entity):
      1. the Commonwealth, a State or Territory;
      2. a body corporate (other than a constitutional corporation) established for a public purpose under a law of the Commonwealth, a State or Territory; or
    2. the beneficial interest in which is vested in a government entity; or
    3. that is for the time being demised or sub-demised to, or in the exclusive possession of, a government entity.
  • Harbour means a natural or artificial harbour, and includes an estuary, navigable river, creek, channel, dock, pier, jetty, offshore terminal or other place in or at which vessels can load and unload goods or embark and disembark passengers.
  • Inland waterways vessel means a vessel (other than a government vessel) that is used wholly in waters other than waters of the sea.
  • Offshore industry vessel means a vessel that is used wholly or mainly in, or in any operations or activities associated with or incidental to, exploring or exploiting the mineral and other non-living resources of the seabed and its subsoil.
  • Recreational vessel means a vessel used wholly for recreational or sporting activities (whether or not let, or intended to be let, for consideration).
  • Salvage operation means any act or activity undertaken to assist a vessel or any other property in danger in any waters.
  • Salvage vessel means a vessel that is used wholly or mainly for salvage operations.

If you are unsure if you have an eligible vessel, you can contact the Department on 02 6274 7474 or by emailing ras@infrastructure.gov.au to seek advice before completing a notice application form.

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Last Updated: 27 January, 2016