DT6853 - Double Taxation Relief Manual: Guidance by country: Falkland Islands: Notes

Students (para. 25)

Payments which a student or business apprentice who is or was immediately before visiting a territory a resident of the UK and is present in the Falkland Islands solely for the purpose of their education or training receives for the purpose of their maintenance, education or training shall not be taxed in the Falkland Islands, provided that such payments arise from sources outside that territory.

Offshore Activities (para. 26)

Article 21 of the 1997 arrangement contains provisions for the treatment of activities in connection with the exploration or exploitation of the sea-bed, sub-soil and their natural resources. The Article provides that:

(a) an enterprise of one country carrying on such activities in the other country is deemed to be carrying on a business in the other country through a permanent establishment, except where the activities in question are carried on in the other country for a period or periods not exceeding in the aggregate thirty days in any twelve month period;

(b) a resident of one country who carries on such activities in the other country consisting of professional services or other activities of an independent character is deemed to be performing those activities from a fixed base in that other country;

(c) Employment income derived by a resident of one of the countries in respect of an employment connected with offshore activities in the other country may be taxed in that other country to the extent that the duties of the employment are performed offshore in that other country;

(d) Gains derived by a resident of one country from the disposal of certain rights, property and shares connected with the exploration and exploitation of the sea-bed etc. situated in the other country may be taxed in that other country (see Article 21(8).

Tax spared

The 1997 arrangement provides for credit to be given in respect of tax ‘spared’ (see INTM161270 - 161290) in the Falkland Islands under the particular provisions of Falkland Islands law set out in Article 24(4). Relief is, however, not to be allowed for tax spared in respect of profits which arise or accrue after 18 December 2007 or where the profits arise in a period beginning more than ten years after relief was first granted in respect of that source, whether that period began before or after 18 December 1997 (see Article 24(5)). Amounts of tax spared for which credit relief is given should be reported in accordance with INTM161290.