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The Cruise industry fly foreign flags on their ships to avoid paying US taxes.

Studies have shown that Cruise ships that are under the flag of convenience fly foreign flags to avoid U.S.taxes.

Studies have shown that Cruise ships that are under the flag of convenience fly foreign flags to avoid U.S.taxes.According to the Journal of Maritime Law and Commerce, a 2015 report from the Cruise Lines International Association revealed that 90% of commercial vessels calling on U.S. ports fly non-U.S. flags including passenger cruise lines, container shipping vessels, oil and gas tankers. Moreover, the majority of cruise ships today are registered to Panama, Liberia and Bahamas which is a legal practice (Refer page No:2). Also, it provides shipowners to exempt from U.S. federal income and branch profits.

In a study authored by Caitlin E. Burke, University of Florida it has been found that Cruise lines have been flying under other flags as early as the 1920s to avoid prohibition laws and sell alcohol on the ship (Refer Page No:6). It stated Cruise lines escape federal taxes and labour laws by registering their corporations and vessels in foreign countries, i.e. Panama, Liberia, and the Bahamas.

Organized Crime and Corruption Reporting Project has revealed that the largest cruise company Carnival, Norwegian and Royal Caribbean have been incorporated in Panama, Bermuda and Liberia. They have been paying an average tax rate of under 1% well below the required 21% corporate tax rate in the United States.

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