SE67125 - Tax treatment of workers in the North Sea and other offshore oil and gas fields – effect of double taxation agreements

Many double taxation agreements have a 'dependent services article' which exempts non-residents from United Kingdom tax provided they work for an overseas employer and are in the United Kingdom for less than half the year (see DT220). Most of them use for this purpose a definition of the United Kingdom which includes designated areas of the Continental Shelf, but some of the older ones do not. Where an agreement does not specifically mention the Continental Shelf, employees working there should not be regarded as working in the UK for the purposes of the agreement.

In the case of residents of Italy, Jersey, Guernsey and the Isle of Man working on the Continental Shelf, until 5 April 1989 we did accept claims to exemption made under dependent services articles, but as from that date they should be regarded as liable to United Kingdom tax under Case II and not entitled to exemption under a double taxation agreement. The change of practice was announced in a Press Release dated 3 March 1989.