• Service: Tax, Corporate Tax
  • Industry: Transport & Logistics
  • Type: Regulatory update
  • Date: 5/05/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Graem McClelland

Graem McClelland
Director, Tax

+61 2 9335 8677

Australian shipping reform 

by Graem McClelland, Corporate Tax Specialist
The government has released Options Paper on Review of Coastal Trading on the current operation of the Australian shipping industry. Any changes to the Coastal Trading Act including flagging and licensing may have implications for the application of other Commonwealth legislation relating to the regulation of ships in Australia, including workplace relations, customs, immigration and taxation matters. Submissions are due by 31 May 2014.

The Options Paper summarises key shipping tax reforms from 1 July 2012 directed at blue water transport vessels, including:

  • For Australian ship owners – accelerated tax depreciation, with a 10 year capped effective life.
  • For Australian ship operators – a full income tax exemption and an exemption from royalty withholding tax on bareboat leases.
  • A 30 percent seafarer rebate is payable to the Australian ship operator for salary paid to eligible Australian crew on international voyages. 


The tax concessions should be favourable for coastal trade and commodity exports and apply on a vessel by vessel basis. In harbour (barges, tugs, ferries), offshore industry (minerals exploration and mining) and defence vessels are excluded from the tax concessions. 


The Options Paper provides an opportunity to make submissions on the effectiveness of regulation within the Australian shipping industry and indirectly associated tax concessions.


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