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HMRC internal manual

Oil Taxation Manual

HM Revenue & Customs
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Non-Residents Working on the UK Continental Shelf: Scope of Exploration or Exploitation Activities - Examples of the Scope of the Legislation

Cases where profits are brought within the charge to UK tax (subject to the provisions of any relevant Double Tax Treaty):

A non resident company with no UK branch or agency constructs a pipeline from the East Coast to an oil production platform in the UKCS. The activities are “exploration or exploitation activities” (OT40600) carried on in the UK (OT40550) and/or in a designated area (OT40650). Profits from the activities are treated as arising from a UK branch or agency (OT40725).

A self-employed non resident individual acts as a drilling consultant on a production platform. The services rank as “exploration or exploitation activities” (OT40600) carried on in a designated area (OT40650) and the individual is taxed on the basis that any profits arose from activities performed in the UK mainland.

A non resident company collects manganese nodules lying on the seabed between 10 and 20 miles off the coast of Cornwall. The consequences are as in (1) above

Cases where profits are not brought within the charge to UK tax

A non-resident company lays a pipeline from a Norwegian field across the UK Continental Shelf solely for the purpose of transporting Norwegian oil or gas to the UK. The activities are not connected with the exploitation of UK resources (OT40600).

A non-resident company constructs at Cherbourg a production platform for a UK field. The construction activities are not carried on in the UK or in a designated area (OT40550/OT40650).

A non resident company constructs a pipeline to transport gas from a UK field across the Dutch sector of the North Sea. Activities carried on in the Dutch sector are of course not carried on in the UK or in a designated area (OT40550/OT40650).