Section 233
Section 233: amalgamation and demerger
Section 233 explains how the tonnage tax scheme carries forward when a tonnage tax company is involved in a corporate amalgamation or demerger, so that the benefit of an existing option is not automatically lost through restructuring.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
Amalgamation
Where a company amalgamates with another company or companies, the tonnage tax scheme provisions apply, as far as may be, to the amalgamated company - provided it is a qualifying company.
If the amalgamated company is not already a tonnage tax company, it must exercise the option under Section 231(1) within three months from the date the scheme of amalgamation is approved.
Where the amalgamating companies were both tonnage tax companies, the scheme applies to the amalgamated company for as long as the option with the longest unexpired period would otherwise have continued.
Where one of the amalgamating companies was a qualifying company as on 1 October 2004 but had not exercised the tonnage tax option before 1 January 2005, the scheme does not apply to the amalgamated company, and its shipping income is computed under the Act's other provisions.
Demerger
Where, in a scheme of demerger, the demerged company transfers its business to the resulting company before the tonnage tax option expires, the scheme applies, as far as may be, to the resulting company for the unexpired period - provided it is a qualifying company.
The option in respect of the demerged company itself remains in force for the unexpired period, as long as the demerged company continues to be a qualifying company.
Frequently asked questions
Does an amalgamated company automatically inherit the tonnage tax option?
The scheme applies to the amalgamated company only if it is a qualifying company; if it was not already a tonnage tax company, it must apply for the option within three months of the amalgamation being approved.
What happens if both companies in an amalgamation already had the tonnage tax option?
The scheme continues to apply to the amalgamated company for whichever unexpired period is the longer of the two original options.
Related sections
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Talk to our tax team about tonnage tax scheme continuity on amalgamation/demergerLast updated 9 September 2026