- 1
- The provisions of this Article shall apply notwithstanding any other provision of this Convention.
- 2
- An enterprise of a Contracting State which carries on offshore activities in the other Contracting State shall, subject to paragraph 4, be deemed in relation to those activities to be carrying on business in that other State through a permanent establishment situated therein.
- 3
- In this Article the term “offshore activities” means activities which are carried on offshore in a Contracting State in connection with the exploration or exploitation of the seabed and its subsoil and their natural resources situated in that State, including activities in connection with production of energy from the water, currents, sun and winds.
- 4
- The provisions of paragraph 2 shall not apply where the activities are carried on for a period not exceeding 30 days in the aggregate in any twelve month period commencing or ending in the fiscal year concerned. However, for the purposes of this paragraph:
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- (a)activities carried on by an enterprise that is associated with an enterprise of a Contracting State shall be regarded as carried on by the last mentioned enterprise if the activities carried on by both enterprises are substantially the same;
- (b)two enterprises shall be deemed to be associated if:
- (i)an enterprise participates, directly or indirectly, in the management or control of the other enterprise or holds directly or indirectly at least 30 per cent of the capital of the other enterprise, or
- (ii)the same person or persons participate directly or indirectly in the management or control of both enterprises or hold directly or indirectly at least 30 per cent of the capital of both enterprises.
- 5
- For the purposes of paragraph 3 of this Article the term “offshore activities” shall be deemed not to include:
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- a)one or any combination of the activities mentioned in paragraph 5 of Article 5;
- b)towing or anchor handling by ships primarily designed for that purpose and any other activities performed by such ships;
- c)the transport of supplies or personnel by ships or aircraft in international traffic.
- 6
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- a)Subject to sub-paragraphs b) and c) of this paragraph, salaries, wages and similar remuneration derived by a resident of a Contracting State in respect of an employment connected with offshore activities in the other Contracting State may, to the extent that the duties are performed offshore in that other State, be taxed in that other State.
- b)However, such remuneration shall be taxable only in the first-mentioned State if:
- (i)the recipient is present in the other State for a period or periods not exceeding in the aggregate 30 days in any twelve-month period commencing or ending in the fiscal year concerned, and
- (ii)the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
- (iii)the remuneration is not borne by a permanent establishment which the employer has in the other State.
- c)Salaries, wages and similar remuneration in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a Contracting State engaged in the transportation in international traffic of supplies or personnel to a location where offshore activities are being carried on, or in respect of any employment exercised aboard a tugboat or anchor handling vessel operated by an enterprise of a Contracting State in connection with such activities, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
- 7
- Gains derived by a resident of a Contracting State from the alienation of:
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- a)exploration or exploitation rights; or
- b)technical equipment or other similar property situated in the other Contracting State and directly used in offshore activities, as defined in paragraph 3, carried on in that other State; or
- c)shares deriving more than 50 per cent of their value directly or indirectly from such rights or such property, or from such rights and such property taken together,
- may be taxed in that other State.
- In this paragraph “exploration or exploitation rights” means rights to assets to be produced by the exploration or exploitation of the natural resources, including the exploration or exploitation of the seabed or its subsoil of that Contracting State, rights in connection with production of energy from the water, currents, sun and winds, as well as rights to interests in or to the benefit of such assets.
