BBC Singapore - Company Accounts for 2006

BBC Singapore - Company Accounts for 2006

Close inspection of the accounts of the owning company of MS "BBC Singapore" (Briese Schiffahrts GmbH & Co KG MS Juisterbalje) would show that a decision to 'back date' the vessel into the tonnage tax system as from 01/01/2006 was taken at the end of 2006. Various back-dated invoices and credit-notes were issued by the offshore crewing arm of Briese/leda  (International Transport Consulting and Crewing Ltd, of Nevis - 'managed' by Transat Maritime SAM in Monaco) to produce the desired entries in the company's accounts. Even a cursory inspection by the company's auditors of the bookings into the 'cost of crewing' account would quickly reveal these cosmetic adjusts.

As an example, here are the 'revised' invoices that were produced for January 2006, numbers....12182 and 12321.

Of course, that vessel wasn't crewed per Tonnage Tax regulations at that time and invoice 12182 had really looked like this:

Same thing for March.........here is the revised invoiced recharging supposed 'wages paid on your behalf' which lists the contractual amounts for the crew on board. 

Unusually for Briese Schiffahrts, these were the (nearly) the actual crew members on board, but of course the wages are not quite listed as they were actually paid. Captain Schöder for instance earned EUR 6,680 per month as this schedule shows.

and the other members, USD3100.00, USD2327.00, USD3099.44 and USD2327.22.  Only other problem for the month of our example, March 2006, was that the 1st Engineer was not Mr Purtov but Mr Smol'nyakov as this wage summary from the time shows.

It also follows that under normal circumstances Leda/Briese would have had to make some sort of adjustments concerning the official payslips, and social security deductions and declarations that would usually be produced by 'Thien & Heyenga' as this work was outsourced to them.

Versicherungssteuer......... and how to evade it.

Versicherungssteuer......... and how to evade it.

19% "Insurance Premium Tax" (IPT) is a lot to pay on top of an insurance premium.

So imagine that you were a ‘German resident’ ship-owning or ship management company  that had to arrange insurance ship's crew accident insurance for, say, eighty medium sized general cargo vessels. For arguments sake let's estimate a yearly premium of EUR5000.  That would give a total bill of EUR400.000 and would attract  IPT of EUR76.000 pa.

Over ten years at the same rates you would have to pay EUR 760.000 in IPT !!!

But if one had a convenient non-German, or even 'Offshore' vehicle, one could perhaps arrange for the insurance policy to be subscribed to by that entity and thus avoid the 19% IPT. If premiums needed to be recovered by the offshore company they could simply be included in any transfer pricing arrangements with the German resident company(ies).

Now that's a good idea.

And that is exactly what happens with Briese Schiffarhts and ITCC. By channelling a large part of their insurance premiums via the 'offshore' ITCC (and before that ESC-European Shipping and Chartering Ltd, also of Nevis), Briese Schiffahrts has managed to 'get around' having to pay in the region of EUR1.000.000 in IPT.

ITCC = Briese/Leda Offshore

ITCC = Briese/Leda Offshore

Here's a schedule from 2002, produced by Briese Schiffahrts, which shows the 'TOTAL' cost of crewing 'their vessels'. This is obviously the combined result of the figures from each German 'owning company' and ITCC. The final column is the decision that Briese have taken as as to how to adjust the 'Lumpsum' charged by ITCC to the Owners.

Tonnage Tax 2001 a complete exposé......Part I

Tonnage Tax 2001 a complete exposé......Part I

ITCC's approach to Tonnage Tax was to basically try and avoid, for as long as possible, issuing seafarers with German contracts.  In certain (numerous) cases, usually where an officer was an EU national/resident and would either refuse a German contract or the shipowning company thought that issuing one would cost way too much (with the higher level of salary demanded PLUS higher tax and social security contributions). attract, false contracts were issued in the name of non-european seafarers whose details were in the Briese/Leda database but were not currently employed on another vessel.

It was a full time job for more than one person to try and record who was really working on which vessel.

ITCC could not afford to declare that Captain Cheremsky was master on "Alta Mar" if he was in fact employed as a Captain by another company under a German contract.

Here are schedules for 2001 for the "Alta Mar" (simple and for only 2 months) and the "Ditzum" (more complex and for the whole year).

The rest of 2001...to follow....

Tonnage Tax - Full Example from 2008

Tonnage Tax - Full Example from 2008