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HMRC internal manual

Oil Taxation Manual

Non-Residents Working on the UK Continental Shelf: Scope of Exploration or Exploitation Activities - Companies

Subsections (1) and (3) of CTA09\S1313 are not sufficient by themselves to give the UK a charge to corporation tax where the company carrying on the activities is not resident in the UK since a permanent establishment in the UK is needed before a charge to corporation tax arises (see CTA09\S5). CTA09\1313(2) fills this gap by providing that such profits arising to a non- resident are then to be treated as profits arising from a trade carried on by that person through a UK branch or agency permanent establishment.

The wording of CTA09\S1313(2) does not expressly limit the charge to profits from activities carried on in the UK or the UK Continental Shelf. However, this is now covered under the general provisions in CTA09\S19.

There are two geographical requirements which must both be satisfied before a liability can arise under CTA09\S1313:

  • The location of the resources undergoing exploitation or exploration; and
  • The place of performance of the relevant activities

must be in the UK and/or Territorial Waters and/or the UK Continental Shelf.