CARMEL RICKARD: Murky waters for tax paying SA divers
Where should SA divers working in the UK pay tax? A double tax treaty between the two countries has left the courts at sea
After reading a recent UK appeal court tax decision, I have a new fantasy: in my next taxpayer incarnation I want to be a diver, living in SA but periodically working in the UK. The case concerns MF Fowler, a qualified diver from SA who periodically works in the North Sea waters off the UK. Conditions are difficult and dangerous, but he is paid well — so well, in fact, that the UK tax authorities want a bit of the action for themselves. But each time Fowler’s case has gone to court, the outcome has changed. A double taxation treaty between the UK and SA has made it difficult for the courts to answer a crucial question about Fowler’s case: which of the two countries is entitled to tax the income he derives from his diving work? The latest decision makes much of the fact that the word "employment" is not properly defined in the treaty. To a layman, this is a bizarre omission in a tax treaty, given that tax follows paid employment just as night follows day. But it at least partly expla...
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