Division 10 Malta commits that shipping companies (except ship management companies) will not benefit from tonnage tax (except for ship management companies) unless they:

1. (a)

   have at least 60 % of the tonnage of their fleet^f2 under the flag of a Member State of the Union or of a State party to the EEA Agreement on entering the scheme; or

2. (b)

   maintain or increase the share of tonnage of their fleet that they operated under the flag of a Member State of the Union or of a State party to the EEA Agreement at the moment that they entered the scheme.

In any event, by the third year of operation the organisation must have at least 60 % of the tonnage taxed fleet EEA-flagged.

However, in connection with the initial entry of a shipping organisation into the Maltese tonnage tax system, the said applicable threshold may be reduced to twenty-five percent (25 %). Malta will continue to check that the share of EEA-flagged fleet has not decreased on average over a period of three years (both for existing and new beneficiaries).