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HMRC internal manual

Tonnage Tax Manual

Background Material: Seafarers

Double taxation agreementsTo avoid double taxation, where more than one state has taxation rights over the same income, the UK has double taxation agreements (DTAs) with many other states. Under such an agreement each state agrees to give up, or reduce, its tax in certain circumstances. DTAs complement and usually override domestic law. The terms of DTAs can vary considerably, although most agreements follow the Organisation for Economic Co-operation and Development (OECD) Model Convention.

For employees who are members of the crew of a ship, it is essential to consult the article of the agreement in question, which deals with dependent personal services.

Dependent personal servicesThis term ‘dependent personal services’ includes income from employment. Employment income, derived by a resident of one state, is generally only taxable in that state unless the employment is exercised in the other state. If that is the case, then the other state may tax so much of the income as is derived from the exercise of the employment in that state.

Most articles covering dependent personal services provide that income in respect of an employment exercised aboard a ship operated in international traffic may, depending on the terms of the agreement, be taxed:

  • in the state where the shipping enterprise is resident, or
  • in the state in which its place of effective management is situated.

This does not prevent the income also being taxable in another state, e.g. the state in which the employee is resident.

Further guidance on dependent personal services articles can be found at DT1920 to DT1923.

Offshore activitiesSome DTAs deal specifically with offshore activities. For more information see



Income tax liability of seafarers TTM15300, EIM33000
Guidance for seafarers and employers TTM15300
Residence and ordinary residence TTM15310, EIM33000, EIM33001, EIM42800
Resident and ordinarily resident in UK TTM15320, EIM33000, EIM33001, EIM42800
Resident, but not ordinarily resident, in UK TTM15330, EIM42800
Not resident in UK TTM15340, EIM42800 et seq
DTAs and offshore activities TTM15400, EIM42800 et seq