ARTICLE 20

Offshore Activities

(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 any offshore activities in the other Contracting State in connection with the exploration or exploitation of the seabed or subsoil or their natural resources situated in that other State shall, subject to paragraphs (3) and (4) of this Article, be deemed in relation to those activities to be carrying on business in that other State through a permanent establishment situated therein.

(3) The provisions of paragraph (2) and sub-paragraph (b) of paragraph (6) shall not apply where the offshore 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:

• (a)  activities carried on by an enterprise associated with another enterprise shall be regarded as carried on by the enterprise with which it is associated if the activities in question are substantially the same as those carried on there by the last-mentioned enterprise;
• (b) two enterprises shall be deemed to be associated if:
  • (i) an enterprise participates directly or indirectly in the management, control or capital of another enterprise, or
  • (ii) the same persons participate directly or indirectly in the management, control or capital of both enterprises.

(4) Profits derived by an enterprise of a Contracting State from the transportation of supplies or personnel to a location, or between locations, where offshore activities in connection with the exploration or exploitation of the seabed or subsoil or their natural resources are being carried on in the other Contracting State, or from the operation of tugboats or other vessels auxiliary to such offshore activities, shall be taxable only in the Contracting State of which the enterprise is a resident.

(5)

• (a) Subject to sub-paragraph (b) of this paragraph, salaries, wages and similar remuneration derived by a resident of a Contracting State in respect of an employment connected with the exploration or exploitation of the seabed or subsoil or their natural resources situated 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. However, such remuneration shall be taxable only in the first-mentioned State if the employment is carried on offshore in the other State for an employer who is not a resident of that other State and provided that the employment is carried on there 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.
• (b) Salaries, wages and similar remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship or aircraft engaged in the transportation of supplies or personnel to a location, or between locations, where offshore activities in connection with the exploration or exploitation of the seabed or subsoil or their natural resources are being carried on in the other Contracting State, or in respect of an employment exercised aboard tugboats or other vessels operated auxiliary to such activities, shall be taxable only in the State of which the recipient is a resident, unless the employer is a resident of the other State. In such case the income may be taxed in that other State.

(6) Gains derived by a resident of a Contracting State from the alienation of:

• (a) exploration or exploitation rights; or
• (b) property situated in the other Contracting State and used in connection with the exploration or exploitation of the seabed or subsoil or their natural resources situated in that other State; or
• (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,

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 or subsoil or their natural resources in the other Contracting State, including rights to interests in or to the benefit of such assets.