天美影院

This is the first type mentioned at OT41530 and an example is the UK/Greece DTA (SI1954/142).

In this double taxation agreement (DTA), the term 鈥渢he UK鈥� is defined as 鈥淕reat Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man鈥� (Article II(l)(a)). This covers England, Wales, Scotland and Northern Ireland and the surrounding Territorial Sea but not the designated areas (see OT40650).

The treaty also defines the terms 鈥渙ne of the territories 鈥� as 鈥渢he United Kingdom or Greece, as the context requires鈥� (Article II(1)(c)). For the purposes of this definition 鈥渢he UK鈥� takes the restricted definition in Article II(l)(a).

Article III(2) provides inter alia that 鈥淭he industrial or commercial profits of a Greek enterprise shall not be subject to UK tax unless the enterprise carries on a trade or business in the UK through a permanent establishment situated therein鈥�. This means for example that a company which is a 鈥渞esident of Greece鈥� is not subject to UK tax on profits unless the company is engaged in a trade or business in 鈥渢he UK鈥� (on a geographic restricted definition) through a permanent establishment situated in 鈥渢he UK鈥� (again on a restricted geographical definition).

Consequences for a person protected by this DTA include:

• Activities carried on in a UK designated area do not rank as activities carried on in 鈥渢he UK鈥� [Article II(l)(a)]. CTA09\S1313, ITTOIA05\S874 and ITEPA03\S41 are therefore effectively overridden.
• A facility in a UK designated area (for example an accommodation platform on the UK Continental Shelf made available on a long term basis by a Greek company engaged in construction work) could not rank as a permanent establishment in 鈥渢he UK鈥� [Article III(2)] as the location of the platform is not within the UK as defined in the treaty.
• Although CTA09\S1313 & ITTOIA05\S874 treats profits arising to a non-resident from 鈥渆xploration or exploitation activities鈥� carried on in the UK, the UK territorial sea or in a UK designated area as profits of a trade carried on through a UK branch or agency this deeming provision is overridden by the requirement that only profits arising from a trade or business carried on through an actual permanent establishment in 鈥渢he UK鈥� (on a restricted definition) may be charged to UK tax [Article III(2)].

So a Greek company which carries on short term activities in the UK territorial sea (say pipe laying) or long term activities on the UK Continental Shelf (say platform hook-up work spread over 12 months) is likely to be protected against the effects of CTA09\S1313. It would of course be necessary to test that the company was indeed a 鈥渞esident of鈥� Greece and that it had been able to arrange its operations in such a way as to avoid the setting up of a permanent establishment in 鈥渢he UK鈥� under the 鈥渞estricted definition鈥�.

If the Greek company traded through a branch on the UK mainland it would be liable to UK tax by virtue of CTA09\S5 rather than CTA09\S1313(1) . As the branch will then rank as an actual permanent establishment under the UK/Greece DTA, the company will not be exempt from UK tax.