TullCustoms is responsible for the delivery of fairway dues in their entirety. Fairway dues are provided for by the Act on Fairway Dues (1122/2005) and the related amendment act (1214/2014).
Scope of application of the Act on Fairway Dues
The Act on Fairway Dues applies to ships engaged in merchant shipping in Finland’s territorial waters. The Act on Fairway Dues does not cover the following:
- ships that operate on the Saimaa Canal or Saimaa waters;
- ships that on their way between foreign ports sail through Finnish territorial waters without calling at a port in Finland;
- ships that arrive in and depart from Finland via the Saimaa Canal without calling at a Finnish coastal port;
- cargo and cruise ships with a net tonnage of under 300, and
- passenger ships with a net tonnage of under 600
- ships which are used for icebreaking on the inner and outer territorial waters of Finland and which provide icebreaking services to the Finnish Transport Agency based on contracts or State agreements.
The Act on Fairway Dues categorises ships into four types. Ship type is a deciding factor in determining the amount of fairway dues.
- Passenger ship refers to a ship that can carry at least 120 passengers, excluding cruise ships and high velocity vessels.
- Cruise ship refers to a ship that can carry more than 12 passengers, engages in cruise traffic, and does not load or unload cargo when in Finland, apart from fuel or provisions required for the ship alone. Cruise traffic refers to sea voyages where a ship that is not in regular traffic visits at least two foreign ports in addition to a port in Finland on a single voyage.
- High-velocity vessels are defined in an international convention (Finnish Treaty Series 11/1981).
- Cargo vessels, as defined by the Act on Fairway Dues, include all ships other than passenger ships, cruise ships and high-velocity vessels regardless of their type and purpose of use, even in cases where a ship is not considered a cargo vessel based on technical classification. Ships that do not have transport machinery of their own are considered cargo vessels according to the ship type classification in the Act on Fairway Dues. However, their unit prices are fixed as opposed to other cargo vessels, as provided for by section 6 of the Act on Fairway Dues. Furthermore, combination vessels can be equated with cargo vessels. “Combination vessel” refers to a combination of a vessel not equipped with its own transport machinery and of an attached propulsion vessel with its own machinery, in cases where the design and coupling mechanism of the ships enable them to operate as a single vessel.
Liability to pay fairway dues
Fairway dues are to be paid when a ship arrives in Finland’s territorial waters from abroad, and when a ship arrives in a port in Finland from another port located in Finland.
Fairway dues are not paid when a vessel at a port by Lake Saimaa, or when it collects cargo from another port by Lake Saimaa. However, fairway dues are to be paid for ships arriving in a coastal sea port from the Saimaa Canal.
If a ship unloads cargo it has carried from abroad, leaves passengers travelling from abroad to more than one harbour in Finland, or collects cargo to be taken abroad or passengers in more than one harbour in Finland, fairway dues are paid only once. However, if a ship in foreign traffic takes on cargo or passenger at a port in Finland during the same voyage for the purpose of carrying the cargo or the passengers to another harbour in Finland, fairway dues are to be paid for each port call.
If the ship calls at a foreign port in between loadings taking place in Finland in order to supplement the cargo for technical reasons pertaining to loading, fairway dues are paid only once.
Calculating the amount of fairway dues and unit prices
The amount of fairway dues is obtained by multiplying the net tonnage of the ship by the unit price. A unit price determined based on ice classification is used for cargo and passenger ships. Fixed unit prices regardless of ice classification have been set for cruise vessels and high-velocity vessels.
Ships without transport machinery of their own are considered cargo ships based on the ship type classification of the Act on Fairway Dues, and are subject to regulations concerning cargo ships. However, in contrast with other cargo ships, their unit prices are fixed. The total net tonnage of ships that form a combination of ships constitutes the net tonnage of the combination.
There are separate unit prices for ice classes IA Super and IA. Ice classes IB and IC and ice classes II and III comprise the payment categories.
As concerns the regulations on cargo vessels, in cases where the net tonnage of a ship exceeds 25 000, the amount of tonnage that exceeds 25 000 is multiplied with a number half of the unit price imposed based on the ice class.
Unit prices for fairway dues as of 1 January 2015
|Ice class||Cargo ship
The unit price of a cruise ship is 0.911 euros, that of a high-velocity vessel is 5.381 euros, and the unit price of a ship running without a transport machinery of its own is 2.107 euros.
Maximum fairway due amounts based on port calls and maximum annual rates
The maximum amount of fairway dues for cargo vessels and high-velocity vessels for an individual port call is 53 875 euros. However, the maximum amount of fairway dues for a passenger ship is 16 215 euros, and for cruise ships it is 22 250 euros.
Fairway dues for passenger ships and high-velocity vessels must be paid for the first 30 port calls made during a single calendar year. For cargo ships, fairway dues must be paid for the first 10 port calls made during a calendar year. The payment transactions for combination ships are counted based on the port calls made by the propulsive, machinery-equipped vessel. For cruise ships, fairway dues must be paid for each port call regardless of how many port calls are made.
If the ship occasionally operates as a passenger ship and on other occasions as a cruise ship, the voyages the ship has made in the capacity of a cruise ship are taken into account in counting the annual total number of port calls. The annual maximum amount of fairway dues covering 30 port calls only concerns port calls made in the capacity of a passenger ship.
Fairway due reductions for cargo vessels
A reduction to fairway dues can be obtained based on the degree of use of loading capacity (reduction based on incomplete cargo) if the requirements laid down in the Act on Fairway Dues are met. The reduction is either 75 % or 50 %, depending on how much of the loading capacity is used.
Cargo vessels that collect transit goods from Finnish harbours are subject to fairway dues that are deducted by 50 %. In this context, “export” does not refer to export as defined by customs legislation, but to e.g. transit traffic from Russia to Sweden via a harbour in Finland. An absolute requirement for this is that the entire cargo of the vassel comprises transit goods.
Fairway dues for a cargo vessel are reduced by 75 % if the ship is carrying cargo from abroad which, for a compelling reason due to the size of the cargo, has to be transported on board other ships from the port of arrival to another port in Finland.
For the Saimaa Canal, fairway dues are deducted by 50 % when the ship transports cargo to a harbour on the coast of Finland from abroad while en route to the Saimaa Canal, and when the ship exports cargo abroad from a harbour on the coast of Finland in connection with a voyage to the Saimaa Canal.
The loading capacity utilization rate is calculated by comparing the figure showing the combined total of cargo imported to and exported from Finland, as indicated in metric tonnes with a figure that is 90 per cent of the ship’s deadweight. When the ship’s utilization rate is calculated, the ship’s cargo in transit is added both to the cargo imported and to the cargo exported.
Obligation to declare fairway dues
The party liable to pay fairway dues must submit an electronic fairway due declaration to Customs for the payment to be issued. The fairway due declaration must include the necessary details required for issuing the payment. The following regulations apply to information to be provided for fairway due payment orders:
- Decision by the Finnish Board of Customs on the declaration procedure concerning ships arriving in and departing from harbours in Finland (in Finnish) (record No. 65/010/12, 16 May 2012)
- Order by Finnish Customs on amending the decision by the Finnish Board of Customs on the declaration procedure concerning ships arriving in and departing from harbours in Finland (in Finnish) (171/2013, 19 December 2013)
Payments based on assessments
If the lodging of a fairway due declaration is neglected or an insufficient declaration is provided, payment of fairway dues may be ordered based on an assessment. In such situations, customs authorities must advise the party liable to pay fairway dues to provide a fairway due declaration or to complete the required information in an insufficient declaration, emphasising that failure to do so will result in the imposition of an assessment-based payment.
If, despite requests, the payment declaration has not been lodged or the fairway due payment cannot be collected even based on a completed declaration, the payment will collected according to assessment. Before Customs orders a payment based on assessment, the customer has the opportunity to be heard.
Customs may impose a payment increase or penalty fee in connection with imposing an assessment-based payment.
If Customs has not entirely or partly imposed fairway dues because the party liable for payment has neglected the obligation to declare or lodged an insufficient, misleading or erroneous declaration or some other item of information or document, or in the event that the payment has been refunded in an amount too high, the customs authority must request the party liable for payment to pay the fairway dues that were not imposed.
The period of subsequent taxation is three years. As concerns representatives of shipowners, subsequent payment must take place within 18 months. However, the shorter period of payment applied to representatives requires that the shipowner’s representative based in the European Union or the European Economic Area did not know, and was not supposed to have known, that the declaration, document or other item of information lodged for issuing the payment was insufficient, misleading or erroneous.
Payment reduction and payment deferment
Upon application, Customs may reduce the amount of paid or payable fairway dues, payment increase, late payment interest or interest payable due to payment deferment, or cancel the amount in its entirety. This relief provision is applied only in exceptional circumstances.
Applications for payment reduction and payment deferment are to indicate the reasons and the target of the application. Applications must be signed by a party/parties entitled to sign documents on behalf of a company. If the application was drafted by an agent, the power of attorney must be enclosed with the application. Applications are to be addressed to the Customs Foreign Trade and Taxation Department. See contact details at the bottom of the page.
Customs sends a written decision to the applicant. The decision can be appealed by sending a claim for revision to Customs.
A payment deferment for fairway dues can be applied for with Customs.
- A payment deferment can be granted if, considering the circumstances, the levying of fairway dues would be obviously unreasonable, or if there are other specific reasons for granting a deferment.
- In cases of payment deferment, tax debt is paid based on an instalment plan.
Payment deferment is applied for with a written application. The customer will receive a written, free-of-charge decision in reply to the application. A revision to the decision can be applied for with Customs. If Customs grants a payment deferment, interest on the deferment will be levied for the period of deferment.
Applications for payment deferments are to be addressed to Customs Tax Collection. See contact information at the bottom of the page.
Applications should contain the following information:
- Information on the applicant’s company, and contact details
- A proposal for a payment plan
- Statement of reasons for which the deferment of payment should be granted / grounds for the application
- Information on which decision on shipping dues a payment deferment is applied for
- If the application is drafted by a representative, a power of attorney must be enclosed with the application
Upon application by the customer, Customs can provide a written advance ruling on how regulations on fairway dues are applied if the matter is of particular importance to the applicant. However, advance rulings are not issued on ice classes or net tonnages of ships, or on amounts of fairway dues.
Advance rulings are issued on specified questions, and the applicant must provide the necessary account for solving the matter. Advance rulings are given for fixed time periods. A legally valid advance ruling must be complied with as a binding decision as prescribed by the ruling.
Advance rulings are subject to charge according to decree 1364/2016 of the Ministry of Finance.
Applications for advance rulings are to be addressed to the Foreign Trade and Taxation Department of Finnish Customs. See contact information at the bottom of the page.
Appeals concerning decisions by Customs
Customs can claim for revisions of decisions by Customs other than those that concern advance rulings. Decisions on advance rulings are to be appealed directly to Helsinki Administrative Court.