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Wednesday, July 18, 2018

NATIONAL MERCHANT MARINE RENEWAL LAW

The National Legislative Commission (Congresillo) of Venezuela has approved the National Merchant Marine Renewal Law. The most important aspects of this new legal instrument worth drawing your attention to are the following:

All matters related to domestic or international maritime transport -carrying of person or goods by sea - and in general, all maritime and shipping activities are declared as items of public interest and given strategic status.

Coastal trade is reserved to Venezuelan-Flagged vessels, and waivers will only be granted under exceptional circumstances.

Temporary or definitive flagging-in of vessels and navigational accessories, including oil well drilling platforms are exempted from applicable dues and taxes (Wholesale Tax, Custom duties, tariffs and fees).

It is granted an income tax (ISLR) reduction of 75% on new investments for the following situations:

  • acquisition of vessels
  • chartering of vessels
  • navigational accessories
  • technology equipment for safety at sea
  • expansion (jumborizing) and improvement of vessels
  • establishing new companies
  • purchasing of shares on existing companies
  • employee training programs

This tax benefit could be extended up to fifteen fiscal years, including debt equity swap finance scheme.

It establishes that all vessels and accessories that enjoy tax privileges must undergo repairs at national shipyards, unless there is force majeure situation.

The Ministry of Infrastructure (Transport), under advise of the National Merchant Marine Council, will review the validity and legality of the coastal trade permits issued to foreign vessels existing at this moment.

The Ministry of Infrastructure (Transport) will proceed to establish, together with the stakeholders related to the Maritime Sector, inherent State policies and also will submit proposals for the drafting of a new "Venezuelan Aquatic Space Organic Law", it will embrace all the existing maritime related laws into one.

Source: AGEMAR