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- 1. The provisions of this Article shall apply notwithstanding any other provision of this Convention.
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- 2. 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 subsoil and their natural resources situated in that State.
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- 3. An enterprise of a Contracting State which carries on offshore activities in the other Contracting State shall, subject to paragraphs 4 and 5 be deemed to be carrying on business in that other State through a permanent establishment situated therein.
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- 4. The provisions of paragraph 3 shall not apply where the offshore activities are carried on in the other Contracting State for a period or periods not exceeding in the aggregate 30 days in any twelve month period beginning or ending in the fiscal year concerned. For the purposes of this sub-paragraph:
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- (a) where an enterprise of a Contracting State carrying on offshore activities in the other Contracting State is associated with another enterprise carrying on substantially similar offshore activities there, the former enterprise shall be deemed to be carrying on all such activities of the latter enterprise, with the exception of activities which are carried on at the same time as its own activities;
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- (b) an enterprise shall be regarded as associated with another enterprise if one participates directly or indirectly in the management, control or capital of the other or if the same person or persons participate directly or indirectly in the management, control or capital of both enterprises.
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- 5. The provisions of paragraph 3 shall not apply to the transportation of supplies or personnel by a ship or aircraft to a location where offshore activities are being carried on, or to the operation of tug boats or anchor handling vessels in connection with such activities.
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- 6. 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.
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- b) However, such remuneration shall be taxable only in the first-mentioned State if:
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- (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
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- (ii) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
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- (iii) the remuneration is not borne by a permanent establishment which the employer has in the other State.
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- 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 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 may be taxed in that State.
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- 7. Gains derived by a resident of a Contracting State from the alienation of:
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- a) exploration or exploitation rights;
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- b) property situated in the other Contracting State and used in connection with offshore activities, as defined in paragraph 2, carried on in that other State; or
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- c) shares deriving their value or the greater part of their value directly or indirectly from such rights or such property or from such rights and such property taken together;
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- 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 seabed and subsoil and their natural resources in the other Contracting State, including rights to interests in or to the benefit of such assets.