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The government announced that the “Offshore Receipts in respect of Intangible Property (ORIP)” rules will be repealed for income arising from 31 December 2024.
The ORIP rules apply a charge to UK income tax on amounts arising to persons not resident in a state with which the UK has a full tax treaty and which are derived from the enjoyment or exercise of intangible property rights, where those intangible property rights contribute to UK sales. The repeal of ORIP will remove this charge to UK income tax, albeit with the intention that a similar policy objective will be served by the introduction of the Pillar 2 Undertaxed Profits Rule.
The rules will be repealed for income arising from 31 December 2024.
This is a welcome simplification of the UK tax regime given that the policy objective is expected to be met by the Pillar 2 rules, albeit the income will be subject to tax under a different set of rules (and associated compliance), rather than via income tax.