Proposal to increase the competitiveness of the Swedish shipping industry

by Ebba Perman Borg


Docked container ship.

In June 2023, the Swedish Government took a step towards strengthening the Swedish shipping industry by initiating a review of the tonnage tax regime (see our previous article here). The investigator's proposal, published in a memorandum on 25 January 2024, includes a proposed abolition of stamp duty on shipping mortgage as well as a number of important changes to the Swedish tonnage tax regime.


The Swedish tonnage tax regime was introduced in 2017 (more than 10 years after the initial proposal). From 2003 to 2017, the number of Swedish-flagged tank and bulk carriers was reduced by approx. 65% and the number of Swedish flagged ferries was reduced by approx. 40%. The anticipated renaissance in the number of Swedish-flagged vessels following the introduction of the tonnage tax regime has been elusive, with only a marginal halt in the decline observed since its introduction.

The investigator's proposal includes several key reforms with the aim to improve the current tonnage tax regime and strengthen the conditions for the Swedish shipping industry.

Abolishing the stamp duty

The Swedish stamp duty on ship mortgages increases costs of registering ships in Sweden and makes it less attractive to hold Swedish registered ships. The proposal to remove the stamp duty would make Sweden a more attractive flag state, hopefully reversing the trend of declining registrations.

Expanding the horizon

To qualify for tonnage tax, a ship must under the current regime be used to 75% or more in international traffic. The proposal to lower the requirement for international traffic to 10% would allow most shipping companies, except those whose vessels exclusively operate in domestic traffic, to qualify for tonnage tax.

Special maritime transport

The proposed expansion to include specialised maritime activities such as towing, offshore support, cable installations, and ships engaged in natural resource exploration, would align Sweden's policy with those of Denmark and Norway, fostering a more competitive Swedish shipping industry.

Lowering the threshold

The investigator has proposed that the requirement for the minimum qualified ship size be lowered to a gross tonnage of 20, instead of the current requirement of 100. The rational is, among other things, to decrease the risk that the size of the ship itself constitutes a barrier for e.g. special maritime transport and would match the threshold applied in the Danish regime.

Simplified tax depreciation

A company having reported accelerated tax depreciation on tangible assets, e.g. on ships, at the time of entering the tonnage tax system, must reverse the accelerated tax depreciation, but may book a matching provision to an accelerated depreciation fund in the accounts provided that the company has increased its tonnage.

The investigator has proposed that the requirement for the tonnage to have increased at the five-year reconciliation is removed, instead making it sufficient if the tonnage has not decreased. Further, the investigator has proposed that in certain cases, a binding agreement on the delivery of a newly built ship shall be comparable within an actual delivery of a new ship when assessing if the tonnage has increased.

The proposed modifications to tax depreciation rules aim to make the transition to tonnage tax smoother and more attractive for shipping companies.

Next steps

The proposal has been handed to the Swedish Minister for Infrastructure and Housing to be further processed. Before a final proposal can be adopted by the Swedish Parliament, and a reform take effect, the proposal would need to be approved by the European Commission.

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