Offshore receipts in respect of intangible property (ORIP) repeal
Published 30 October 2024
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This publication is available at https://www.gov.uk/government/publications/repeal-of-the-offshore-receipts-in-respect-of-intangible-property-orip-rules/offshore-receipts-in-respect-of-intangible-property-orip-repeal
Who is likely to be affected
Large multinational groups that hold intangible property in low tax jurisdictions, where income arising in relation to that intangible property is referable to the sale of goods or services in the UK.
General description of the measure
This measure will repeal the offshore receipts in respect of intangible property (ORIP) rules at Chapter 2A of Part 5 Income Tax (Trading and Other Income) Act 2005.
Policy objective
ORIP was a short-term unilateral measure aimed at disincentivising large multinational enterprises (MNEs) from holding intangible property in a low tax jurisdiction if the intangible property is used to generate income in the UK. Such MNEs can thereby gain an unfair competitive advantage over MNEs that hold intangible property in the UK, as well as eroding the UK tax base.
The ORIP legislation is no longer required because the OECD and G20 Inclusive Framework’s Pillar 2 global minimum tax will more comprehensively discourage the multinational tax-planning arrangements that ORIP sought to counter. Repeal will take place alongside the introduction of Pillar 2’s undertaxed profits rule in the UK from 31 December 2024.
Background to the measure
The previous government announced at Autumn Statement 2023 it would abolish ORIP.
The ORIP rules were introduced by section 15 of, and Schedule 3 to, Finance Act 2019. A tax information and impact note was published on 29 October 2018 which provides further details on the regime.
Detailed proposal
Operative date
The legislative changes made in this measure will repeal the ORIP rules in respect of income arising on or after 31 December 2024.
Current law
The ORIP rules are at Chapter 2A of Part 5 of the Income Tax (Trading and Other Income) Act 2005.
Proposed revisions
The legislation at Chapter 2A of Part 5 Income Tax (Trading and Other Income) Act 2005 will be repealed.
Summary of impacts
Exchequer impact (£ million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| — | - 10 | - 40 | - 30 | - 35 | - 35 |
The combined figures for the repeal of ORIP and implementation of the UTPR are set out in Table 5.2 of Autumn Budget 2024 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Statement 2023.
Economic impact
The measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure has no impact on individuals or households as it only affects businesses.
The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that this measure will have any impacts on those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on around 30 large multinational groups that hold intangible property in low-tax jurisdictions, where income arising in relation to that intangible property is referable to the sale of goods or services in the UK.
One-off costs could include familiarisation with these changes. There are not expected to be any continuing costs. There may be continued administrative savings for businesses, as they will no longer need to complete a UK Income Tax return for ORIP purposes.
Customer experience is expected to remain the same. This measure is expected overall to have no impact on businesses’ experience of dealing with HMRC, as the tax implications of ORIP will be dealt with under the new Pillar 2 rules.
There is not expected to be any impact on civil society organisations.
Operational impact (£ million) (HMRC or other)
The additional costs or savings for HMRC in repealing this measure are anticipated to be negligible.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through communication with affected taxpayers.
Further advice
If you have any questions about this change, contact us by email: orip.technicalqueries@hmrc.gov.uk.