§ Sir William Clarkasked the Chancellor of the Exchequer what arrangements exist in each member state of the European Economic Community to exempt from tax income derived from shipping companies from the sale of ships; and what conditions have to be met to qualify for such tax exemption.
§ Mr. Norman Lamont[pursuant to his reply, 30 June 1986, c. 411]: The only member state of the European Economic Community to exempt from tax unconditionally proceeds received by shipping companies from the sale of ships is Greece. This is part of the special tax regime for ships sailing under the Greek flag.
The only other Community country where such gains would generally be exempt from tax is Spain which exempts from tax gains from the sale of most tangible fixed assets of a company to the extent that the proceeds are reinvested in the purchase of other such assets: ships are included in this regime. Reinvestment must normally take place in the year of sale or the two following years, but the tax authorities may in some circumstances extend the period to four years. Exemption is also available where a replacement assets has been acquired in the year preceding the sale. Exemption is conditional on the new asset being retained until fully depreciated.