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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Double Taxation Relief Manual: Guidance by country: Isle of Man: Offshore activities

Paragraph 9A of the agreement (introduced by the 1991 amending agreement - see DT9950) contains provisions for the treatment of activities in connection with the exploration or exploitation of the sea-bed, sub-soil and their natural resources. The Paragraph provides that

a) an enterprise of one territory carrying on such activities in the other territory is deemed to be carrying on a business in the other territory through a permanent establishment except where the activities are carried on there for a period or periods not exceeding in the aggregate thirty days in any period of twelve months;

b) a resident of one territory who carries on such activities in the other territory consisting of professional services or other activities of an independent character is deemed to be performing those activities from a fixed base in that other territory, except where the activities are performed there for a period or periods not exceeding in the aggregate thirty days in any period of twelve months;

c) profits derived by a resident of one territory from the transportation of supplies by the operation of ships or aircraft to a location or locations in the other territory are taxable only in the territory of which the operator is a resident;

d) profits derived by a resident of one territory from the operation of tug boats registered in and normally operating from a port in that territory in connection with such activities are taxable only in the territory of which the operator is a resident;

e) employment income derived by a resident of one of the territories in respect of offshore activities in the other territory may be taxed in both territories, except that where the employment is exercised aboard a ship, aircraft or tug boat engaged in the operations outlined at (c) and (d) above, the remuneration is taxable only in the territory of which the employee is a resident.