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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Norway: offshore activities

Article 21 contains provisions for the treatment of activities in connection with the exploration or exploitation of the seabed and subsoil and their natural resources. The Article provides that:

  1. an enterprise of one country carrying on such activities in the other country is deemed to be carrying on a business in the other country through a permanent establishment;
  2. profits derived by a resident of one country from the operation of ships or aircraft for the purpose of transporting supplies and personnel in connection with such activities are taxable only in the country of the operator’s residence.

Where a resident of one country makes a gain from the disposal of certain rights, property and shares connected with the exploration and exploitation of the seabed, etc., situated in the other country, that other country may tax such gains. See Article 23(87).

Offshore employment

There are also provisions for the taxation of residents of each country on earnings from employment in connection with such activities. Under the agreement the income from employment is taxable in both countries.

Guidance on the application of PAYE in circumstances where employment falls within these provisions can be found at PAYE 8175.