Juncker says EU pressed Greece to raise tax on ship owners

BRUSSELS (Reuters) - European Commission President Jean-Claude Juncker said on Monday he had sought to get Greece to raise more tax from its shipping magnates as part of a cash-for-reform deal that the Athens government has rejected.

The Greek fleet, which includes Greek and foreign-flagged ships, is one of the biggest in the world and provides a vital generator of income for the country. But the current tax system allows for voluntary payments by shipping companies and owners, who include some of the country's wealthiest tycoons.

In the course of the failed negotiations, Juncker said the European Union had sought "more social fairness by challenging vested interests".

"I had to do the job of the Greek government - to impose a less favorable tax treatment for ship owners, although this is common sense and in line with tax justice," Juncker told a news conference in Brussels.

The breakdown in talks between Athens and its international creditors has plunged the country deep into crisis and increased the risk it will have to quit the euro zone.

Under proposals from Greece's creditors, shipping companies would face paying a higher tonnage tax and a phasing-out of special tax allowances which they have enjoyed, according to documents seen by Reuters last week.

While Greek shipping magnates generally operate from the Athens suburbs and the port of Piraeus, their companies are largely registered in the likes of the Marshall Islands and the Turks & Caicos. The firms are often listed on stock exchanges abroad and their ships fly foreign flags such as Liberia's. Nonetheless, such companies still pay tax in Greece.

Any attempt to impose heavy taxes after decades of relative fiscal freedom would increase the risk of an exodus of oligarchs and businesses which are major employers, further damaging Greece's economy.

(Reporting by Jonathan Saul; Editing by Mark Trevelyan)