The Cyprus parliament approved on 15 April 2020 the amendment of the Merchant Shipping (Fees and Taxing Provisions) Law, which includes an extension of the application of the tonnage tax regime. With the amendment, the regime is extended by 10 years, including the tax exemption for employment income of masters, officers, and crew members of EU flag eligible ships. The extension applies to ship ownership, ship management, and ship chartering activities.

Amendments to the regime are also made with respect to eligible ships to include ships engaged in the offshore and oil and gas sector. The definition of maritime transport is also amended to allow auxiliary activities to qualify for the tonnage tax regime. This includes that auxiliary shipping activities are eligible to be subject to tonnage tax as long as the revenue generated from such activities does not exceed 50% of the total gross revenues from the operation of each eligible vessel under the tonnage tax regime.

The approval of the extension by parliament follows the approval of the Cyprus tonnage tax regime by the European Commission in December 2019.