The government has laid the final regulations amending the ‘offshore receipts in respect of intangible property’ (ORIP) rules introduced by Finance Act 2019, which tax multinational groups’ income from intellectual property held in low-tax jurisdictions, to the extent that income is referable to UK sales.
The Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations, SI 2019/1452, amend the rules to: extend the charge to businesses that do not qualify for relief under an existing treaty; introduce a regulation-making power to exempt companies in specified jurisdictions; clarify when online advertising will be a UK sale and introduce ‘look-through’ rules for resellers; ignore sales for which the intellectual property contribution is insignificant; and prevent double taxation of partnerships taxed under an existing treaty and entities in the same control group.
Those amendments which are wholly relieving have effect from 6 April 2019 when the rules commenced, while the others will apply only to amounts arising on or after 5 November 2019. HMRC consulted on two draft versions of the regulations earlier this year.
HMRC has also published draft technical guidance on the ORIP rules, which will form new International Manual chapter INTM870000.
The government has laid the final regulations amending the ‘offshore receipts in respect of intangible property’ (ORIP) rules introduced by Finance Act 2019, which tax multinational groups’ income from intellectual property held in low-tax jurisdictions, to the extent that income is referable to UK sales.
The Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations, SI 2019/1452, amend the rules to: extend the charge to businesses that do not qualify for relief under an existing treaty; introduce a regulation-making power to exempt companies in specified jurisdictions; clarify when online advertising will be a UK sale and introduce ‘look-through’ rules for resellers; ignore sales for which the intellectual property contribution is insignificant; and prevent double taxation of partnerships taxed under an existing treaty and entities in the same control group.
Those amendments which are wholly relieving have effect from 6 April 2019 when the rules commenced, while the others will apply only to amounts arising on or after 5 November 2019. HMRC consulted on two draft versions of the regulations earlier this year.
HMRC has also published draft technical guidance on the ORIP rules, which will form new International Manual chapter INTM870000.
