DT1921 - Non-residents: UK income: Employments: short term visitor exemption 183 day rule

The first condition for exemption under Article 15(2) is that the employee must not be present in the United Kingdom for more than 183 days either `in the tax year concerned' (as in Article 15(2)(a) of the 1980 United Kingdom/USA agreement) or `in any period of 12 months' (found in Article 15(2)(a) of the 1985 United Kingdom/Norway agreement). It is important to distinguish between these formulae. The latter formula is a much tighter test than that used in the agreement with the USA.

For example, a US resident seconded to work in the United Kingdom for a two year assignment arrives here on 15 October 1990 and leaves the United Kingdom on 1 October 1992. Depending on all the circumstances, he could be taxable in the United Kingdom only for the year 1991-92. For the years 1990-91 and 1992-93 he could meet the condition in Article 15(2)(a) because in both periods he was not present in the United Kingdom for 183 days `in the tax year concerned'.

By contrast, a Norwegian resident working in the United Kingdom would be taxable here throughout the period 15 October 1990 to 1 October 1992 under the test in the agreement with Norway.

Our agreements with Azerbaijan, Belgium, Bolivia, Denmark, Estonia, France, Ghana, Guyana, Iceland, Indonesia, Ivory Coast, Kazakhstan, Korea, Latvia, Malta, Mexico, Mongolia, Pakistan, Papua New Guinea, Sweden, Uganda, Ukraine, Uzbekistan, Venezuela and Vietnam also use the wording of the Norwegian agreement; and the agreement with New Zealand is similar. Most of the United Kingdom's agreements, however, use the tax/fiscal year formula.

When counting to 183 days under Article 15(2)(a), a part day counts as a part day, and days of arrival and departure and all other days spent inside the country of activity should be included in the calculation. This rule is different from that applied for the purpose of US residence rules (a part day should be counted as a whole day - DT19860) and United Kingdom residence rules (part days are ignored).