Royal Arctic Line’s newest settlement ship Siuana Arctica, which is currently in the Uummannaq area to pick up frozen goods, sails under the Danish flag and has its home port in Odense, Upernavik’s friendship town. Siuana Arctica will join the Upernavik area from this summer and will supply its nine settlements from Royal Arctic Line’s port in Qasigiannguit.
It was originally announced that the four new settlement ships Siuana Arctica, Maleraq Arctica, Arpaarti Arctica and Tilioq Arctica would fly the Greenlandic flag. However, due to cost considerations, the company eventually had to decide that the ships should fly the Danish flag instead.
The reason for the Danish flag and the Danish home port can be found in the tax law, the so-called DIS scheme. When a ship is registered in the Danish International Ship Register (DIS), seafarers do not have to pay income tax. Royal Arctic Line’s crews do not pay tax to Denmark due to the status of the settlement ships as Danish-registered ships. If the settlement ships were registered in Greenland, the crew members on board these ships would have had to pay income tax in Greenland, and thus it would have been more expensive to maintain the same salary as their colleagues on other ships.
Two factors have therefore been taken into account in this chosen scheme: that the seafarers’ income will be equal to colleagues on the company’s other ships, and that Royal Arctic Line will save on tax and administration costs and thus be able to maintain the current freight rates.
Royal Arctic Line must be cost-efficient for the overall development of society. Therefore, the company is committed to avoiding freight rate increases for as long as possible. Without tax exemption, a Greenlandic flag will lead to rate increases. Had tax exemption for the smaller ships been an option, the company would have chosen the Greenlandic flag as a matter of course. Even though it would mean more administration for the shipping company. We are a Greenlandic company and we are proud of that.
– Therefore, the chosen solution is good for both parties as long as there is no international ship register in Greenland. “We have a DIS-like scheme for the passenger ship Sarfaq Ittuk, which we would have liked to use on the new settlement ships. This has not been possible under current legislation, says Anders Bay Larsen, Fleet Manager, Royal Arctic Line.
For large ships, such as Tukuma Arctica, Malik Arctica and Mary Arctica, they must be listed in an international ship register because they are merchant ships and sail to foreign ports. This provides greater flexibility for the shipping company and seafarers, and is more efficient to manage the ships when they are under the same flag. It also makes it easier to offer training to seafarers.
Royal Arctic Line’s next settlement ship is Maleraq Arctica, which will sail to Uummannaq and surrounding settlements and is expected in Greenland in the spring. Maleraq Arctica will be based in Uummannaq’s friendship town Helsingør.
