Royal Caribbean Cruise Lines 2013 Annual Report Download - page 29
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PART I
MALTESE AND SPANISH INCOME TAX
Our Pullmantur ship owner-operator subsidiaries,
which include the owner-operator of CDF Croisières
de France’s ship, qualify as licensed shipping organi-
zations in Malta. No Maltese income tax is charged
on the income derived from shipping activities of a
licensed shipping organization. Instead, a licensed
shipping organization is liable to pay a tonnage tax
based on the net tonnage of the ship or ships regis-
tered under the relevant provisions of the Merchant
Shipping Act. A company qualifies as a shipping orga-
nization if it engages in qualifying activities and it
obtains a license from the Registrar-General to enable
it to carry on such activities. Qualifying activities
include, but are not limited to, the ownership, opera-
tion (under charter or otherwise), administration and
management of a ship or ships registered as a Maltese
ship in terms of the Merchant Shipping Act and the
carrying on of all ancillary financial, security and com-
mercial activities in connection therewith.
Our Maltese operations that do not qualify as licensed
shipping organizations, which are not considered sig-
nificant, remain subject to normal Maltese corporate
income tax.
Pullmantur has sales and marketing functions, land-
based tour operations and air business in Spain. These
activities are subject to Spanish taxation. The tax
from these operations is not considered significant to
our operations. As a result of Pullmantur’s increased
focus in Latin America and need to have operating
management closer to its largest and fastest growing
market, Pullmantur has opened a regional head office
in Panama. This office has been formed as a “Sedes
de Empresas Multinacionales” (SEM) otherwise known
in Panama as a Multinational Headquarters company.
The SEM regime provides tax advantages for Pana-
manian entities that only carry out transactions with
other entities belonging to their same international
group. This new company is expected to be exempt
from Panamanian taxation.
UNITED KINGDOM INCOME TAX
We operate thirteen ships under companies which
have elected to be subject to the United Kingdom
tonnage tax regime (“U.K. tonnage tax”).
Companies subject to U.K. tonnage tax pay a corporate
tax on a notional profit determined with reference to
the net tonnage of qualifying vessels. Normal United
Kingdom corporate income tax is not chargeable on
the relevant shipping profits of a qualifying U.K. ton-
nage tax company. The requirements for a company
to qualify for the U.K. tonnage tax regime include
being subject to United Kingdom corporate income
tax, operating qualifying ships, which are strategically
and commercially managed in the United Kingdom,
and fulfilling a seafarer training requirement.
Failure to meet any of these requirements could cause
us to lose the benefit of the tonnage tax regime which
will have a material effect on our results of operations.
Relevant shipping profits include income from the
operation of qualifying ships and from shipping
related activities. Our United Kingdom income from
non-shipping activities which do not qualify under
the U.K. tonnage tax regime and which are not con-
sidered significant, remain subject to United Kingdom
corporate income tax.
BRAZILIAN INCOME TAX
Pullmantur and our U.K. tonnage tax company charters
certain ships to Brazilian companies for operations in
Brazil from November to May. Some of these charters
are with unrelated third parties and others are with a
Brazilian affiliate. The Brazilian affiliate’s earnings are
subject to Brazilian taxation which is not considered
significant. The charter payments made to the U.K.
tonnage tax company and to Pullmantur are exempt
from Brazilian income tax under current Brazilian
domestic law.
OTHER TAXATION
We and certain of our subsidiaries are subject to
income tax in other jurisdictions on income that does
not qualify for exemption or tonnage tax regimes. The
tax on such income was not material to our results of
operations for all years presented. Our U.K. tonnage
tax companies are exempt from some taxation in cer-
tain jurisdictions where those companies have business
operations under relevant United Kingdom tax treaties.
CDF Croisières de France’s operations within France
are minimal and therefore, its French income taxes
are minimal.
WEBSITE ACCESS TO REPORTS
We make available, free of charge, access to our
Annual Reports, all quarterly and current reports and
all amendments to those reports, as soon as reason-
ably practicable after such reports are electronically
filed with or furnished to the Securities and Exchange
Commission through our website at www.rclinvestor.
com. The information contained on our website is not
a part of any of these reports and is not incorporated
by reference herein.